TKN : Annual Report 2015 by ar.tkn

Annual Report 2015

Taokaenoi Food & Marketing Public Company Limited

Contents

Part 1 Business Operation

1 2 3 4 5 6

Overview of Business and Vision Message from the Board of Directors Financial Results Operating Overview Business Highlight Supplementary Information

01 02 03 05 06 08

Part 2 Management and Corporate Governance 7 8 9 10 11 12

Securities and Shareholders Management Structure 8.1 Board of Directors 8.2 Executives 8.3 Remuneration for the Board and the Executives 8.4 Human Resources Corporate Governance 9.1 Corporate Governance Policy 9.2 The Sub-committees 9.3 Nomination and Appointment of Directors and Chief Executive Officer 9.4 Oversight of Company’s Subsidiaries and Associates 9.5 Internal Information Control 9.6 Audit fee 9.7 Good corporate governance guidelines in other aspects Corporate Social Responsibilities Internal Control and Audit Risk Management Risk Management

Part 3 Financial Position and Operating Performance

1 3 14 15 16

Report on the Board of Director’s Responsibilities for Financial Statements The Audit Committee’s Report Operating Results and Financial Status Consolidated Financial Statements

Part 4 Other Related Information

1 7 References 18 Investor Information

10 13 24 30 31 32 40 45 49 49 50 50 51 55 59

67 68 70 73

125 126

Business Operation

Overview of Business and Vision

Management and Corporate Governance

1. The Company would like to see the culture of nutritious, health, tasty and convenient food consumption all over the world. The Company delivers such value to millions of people around the

These are to achieve the goal of becoming a processed seaweed leader in Asia with the sales of 5,000 million Baht by 2018 and a global brand with the sales of 10,000 million Baht by 2024. Taokaenoi has registered for transformation to a public company and started trading in the Stock Exchange of Thailand (SET) on December 3, 2015 in order to fundraise for the construction of new factory in Rojana Industrial Park, enhance capability of supply chain management and competencies in competition of personnel and resources.

Annual Report 2015

Other Related Information

According to Taokaenoi’s vision of “The Company is committed to developing healthy, tasty and convenient products and build the brand recognition and awareness in the global market”, 4 missions of the Company are established as follows;

world by firstly fulfilling this gap from the seaweed business. 2. The Company aims to develop new innovative products and applies the-state-of-the-art technologies to the production. 3. The Company aims to create the brand awareness for capturing consumers’ attentions. 4. The Company will treat employees, business partners and consumers like a member of the family.

Financial Positions and Operating Results

Taokaenoi Food & Marketing (Public) Company Limited or TKN was established in 2004 with the initial registered capital of 1 million Baht for operating the business of manufacturing and distributing processed seaweed under the brand of “Taokaenoi”. Over the past 11 years, Taokaenoi has developed various and diverse products to meet target groups, such as crispy seaweed, grilled seaweed, Tempura seaweed, roasted seaweed, and other products, and also planned the marketing and expanded both domestic and international distribution channels. In 2015, there are the total sales in 35 countries all over the world.

Message from the Board of Directors

To all shareholders In 2015, Taokaenoi Food & Marketing Public Company Limited has succeeded in various aspects, for example, running and listing in the Stock Exchange of Thailand. The public was so interested in the Company’s shares that many media channels ranked them to be the IPO of the Year. In the year 2015, the Company earned the highest sales and profits since its establishment, which were 3,500 million Baht and 397 million Baht, respectively. The export ratio was 52% of the revenues from the total sales. In addition, the Company started constructing new factory in Rojana Industrial Park in order to support the increasing sales and tentative operation in quarter 4 year 2016. However, to become the leader of processed seaweed in Asia’s markets and the global brand in the snack business as set in the Company’s goal, the board of directors and executive team must carry out operations in accordance with the visions. To earn the fund from being listed in the Stock Exchange of Thailand is also one of the important factors that lead the Company to achieve its goal.

Additionally, in 2016, it is a challenge to the Company as investors from the Stock Exchange and funds interested become shareholders of the Company. Therefore, the board of directors, executives and employees has to strictly focus in the compliance with the good corporate governance policy for complete and perfect performances in order to create the highest benefits to all stakeholders of the Company.

In 2016, the Company has set the goal for the income growth of 10-15% from the previous year in both domestic and international markets, especially Indonesia and Vietnam in ASEAN nations and China is Asia. The strategies are to increase the seaweed consumption volume per person, expand goods distribution channels and launch new products, both seaweed products and other products, and improve performances for creating profits and dividends to shareholders according to the Company’s policies.

On behalf of Board of Director and Management, we would like to thank shareholders, business partners, customers, financial institution, employees, and persons concerned to the Company for supporting, trusting and accepting Taokaenoi which causes the Company to grow and move forward with the sustainability.

Yuth Vorachattarn Chairman of the Board of Directors

Taokaenoi Food & Marketing Public Company Limited

Itthipat Peeradechanpan Chief Executive Officer

Unit

2012 Amount %

Consolidated Financial Statements 2013 2014 Amount % Amount %

2015 Amount %

2,715.6 100.0 %

3,499.7 100.0 %

Business Operation

Financial Results

Statement of Comprehensive Income THB million 2,495.6 100.0 %

Cost of Sales

THB million (1,788.1) (71.7 %) (1,783.0) (65.7 %) (1,778.6) (66.0 %) (2,259.5) (64.6 %)

Gross Profit

THB million

Selling Expenses

THB million

(441.9) (17.7 %)

(556.6) (20.5 %)

(490.7) (18.2 %)

(528.2) (15.1 %)

Administrative Expenses

THB million

(139.8)

(5.6 %)

(196.5)

(7.2 %)

(182.7)

(6.8 %)

(215.7)

(6.2 %)

Operating Profit

THB million

125.8

5.0 %

179.6

6.6 %

243.0

9.0 %

496.4

14.2 %

Other Income

THB million

46.8

1.9 %

5.0

0.2 %

31.3

1.2 %

15.5

0.4 %

Financial Cost

THB million

(23.9)

(1.0 %)

(17.0)

(0.6 %)

(19.6)

(0.7 %)

(16.7)

(0.5 %)

Income Tax Expenses THB million

(43.2)

(1.7 %)

(39.3)

(1.4 %)

(56.1)

(2.1 %)

(98.2)

(2.8 %)

Net Profit

105.4

4.2 %

128.3

4.7 %

198.6

7.4 %

396.9

11.3 %

28.3 %

932.6

34.3 %

916.4

34.0 %

1,240.3

35.4 %

Financial Positions and Operating Results

THB million

707.5

2,695.0 100.0 %

Management and Corporate Governance

Sales Revenue

Statement of Financial Position THB million 1,034.4 100.0 %

1,089.8 100.0 %

1,276.7 100.0 %

2,814.9 100.0 %

- Current Assets

THB million

651.0

62.9 %

695.1

63.8 %

781.7

61.2 %

2,122.2

75.4 %

- Non-Current Assets THB million

383.5

37.1 %

394.7

36.2 %

495.0

38.8 %

692.7

24.6 %

Liiabilities

THB million

786.4

76.0 %

832.9

76.4 %

924.1

72.4 %

971.0

34.5 %

- Current Liabilities

THB million

738.5

71.4 %

795.6

73.0 %

863.5

67.6 %

852.0

30.3 %

- Non-Current Liabilities THB million

47.8

4.6 %

37.3

3.4 %

60.6

4.7 %

119.0

4.2 %

Sharedoldersâ&#x20AC;&#x2122; EquityTHB million

248.1

24.0 %

256.9

23.6 %

352.6

27.6 %

1,843.9

65.5 %

Annual Report 2015

Other Related Information

Assets

Unit

2012 Amount %

Consolidated Financial Statements 2013 2014 Amount % Amount %

2015 Amount %

Financial Ratio Liquidity Ratio :

times

0.88

0.87

0.91

2.49

Day Sales Outstanding

Day

Inventory Turnover

Day

Day Payable Outstanding

Day

Cash Cycle

Day

Gross Margin Ratio

28.35 %

34.34 %

34.00 %

35.44 %

Operation Profit Ratio

5.04 %

6.61 %

9.02 %

14.18 %

Net Proift Ratio

4.15 %

4.72 %

7.28 %

11.29 %

times

3.17

3.24

2.62

0.53

30.35

93.13

100.31

92.06

Profitabiity Ratio :

Financial Analysis Ratio : Debt to Equity Ratio Dividend Yield

Taokaenoi Food & Marketing Public Company Limited

Sales Revenue by Product Category

Sales Revene by Country

Million Baht

2% 1%

Million Baht

34%

2013

66% 1,843.9

971.0

924.1

1,200 800

200

400

2012 Baht

Other Related Information

2014 2015 % on Sales

1,600

34%

2013 2014 2015 % of Liabilities and Sharedolders’ Equity

28%

24%

24% 248.1

2012 Baht

Financial Positions and Operating Results

2012 Baht

2,000

72%

400

2015

396.9

76% 832.9

2014

768.4

1,089.8

1,276.7

1,034.4

2013

1,830.3

2014 2015 % on Sales

4.7% 198.6

4.2%

Shareholders’ Equity

800 600

2012 Baht

1,160.2

2013

7.4%

Million Baht

76%

2015 Hong Kong Other Export Sales

128.3

1,000

2,814.9

1,200

2,500

1,500

1,050.8

2012 Baht

150

Liabilities

3,000

2,000

2014

11.3%

250

Million Baht

2013

450

105.4

Statement of Financial Position Assets

2012

350

6.6% 179.6

2014 2015 % on Sales

5.0% 125.8

2013

9.0% 243.0

200

2012 Baht

Million Baht

14.2%

400

100

2015

250

Net Profit

500

2014

600

300

750 500

China Indonesia Malaysia

200

1,000

2013

496.4

916.4

707.5

932.6

1,240.3

28.3%

34.0%

35.4%

789.8

34.3%

800

400

2012

Million Baht

1,400

600

1,350

1,000

500

Operating Profit

Million Baht

1,000

Roasted Seaweed Other Products

Operating Performance Gross Profit 1,200

1,500

1,450

2015

Sales by Country Million Baht

2,000

1,669.5

Crispy Seaweed Grilled Seaweed Tempura Seaweed

Export Sales

1,534.8

2014

48%

Total Sales Million Baht

1,664.8

2013

Thailand China Indonesia Malaysia Hong Kong Singapore Taiwan Others

23%

1,550

660.3

2012

574.8

450.1

1,750

1,705.8

2,060.6

1,759.2

1,869.0

1,743.0

500

Million Baht

1,650

1,500 1,000

Crispy Seaweed Grilled Seaweed Tempura Seaweed Roasted Seaweed Other Products

Domestic Sales

Million Baht 2,000

2% 3% 10% 3% 4% 6%

Management and Corporate Governance

59%

Sales Revenue by Product Category 2,500

Business Operation

Operating Overview

256.9

352.6

2013 2014 2015 % of Liabilities and Sharedolders’ Equity

Annual Report 2015

Business Highlight 59% Crispy Seaweed 34% Grilled Seaweed

Tempura

Roasted

The Company’s revenue and profit in 2015 mainly came from sales of processed seaweed both crispy and grilled. The crispy seaweeds make the highest revenue accounting for 58.88% of the total revenue which has grown 17.13% from the past year whereas the grilled seaweeds’revenue accounting for 33.47% of the total revenue which has grown up to 77.39% from the past year.

Taokaenoi Food & Marketing Public Company Limited

Others The Company’s consolidated financial statements show revenue from sales in 2014 at the amount of 2,695.0 million baht and in 2015 at the amount of 3,499.7 million baht or increase of 29.86% which is significantly caused by an export growth of 57.76% especially to the Republic of China and Indonesia which has recovered from a decrease of sales volume in the past year. The revenue from export accounts for 52.30% of the total sales which corresponds with the Company’s vision to expand international market in order to be the Regional Brand and Global Brand respectively. In the meantime, domestic sales volume has increased 8.78% from the past year due to an expansion of distribution channels and marketing through tourism which has grown dramatically.

The movement of the cost of sales ratio directly affectsan initial profit ratio which was at 34.00% in 2014 and 35.44% in 2015.

The main debt specified in the Company’s financial statement is short term loan from banks, tradeother payable. At the end of 2014 and 2015, the short term loan from banks was at 290.16 million baht and 264.70 million baht respectively. The trade creditors and other creditors were at 450.79 million baht and 475.92 million baht respectively. The other short term loans in form of bill of exchange was 49.56 million baht in 2014 which was fully paid in 2015. The shareholders account for 352.6 million baht and 1,843.9 million baht in 2014 and 2015 respectively. The debt toequity ratio at the end of 2014 was 2.62 and reduced to 0.53 after the sale of newly issued ordinary shares.

Financial Positions and Operating Results

In considering of the expenses of management, the ratio of expenses of management to revenue from sales specified in the Company’s financial statement in 2014 was at 6.78% which was reduced to 6.16% in 2015. The main expenses are relating to an annual increase salary for human resources and new employment but is lower than sales volume and other expense are controlled according to the budget plan. In considering of the operation profit in the Company’s consolidated financial statement was at 9.02% in 2014 which was increased to 14.18% in 2015. The increase of profit was significantly caused by a reduction percent cost of sales, selling expenses and administrative expenses to sales revenue.

At the end of 2014 and 2015, the Company’s consolidated statement of financial position shows the Company’s total debt at 924.1 million baht and 971.0 million baht respectively.The increase of overall debt was mainly caused by a drawdown of credit facilities to purchase lands and equipment for a construction of a new factory before receiving money from newly issued ordinary shares deducted with partially debt repayment according to the Company’s working capital management plan.

Management and Corporate Governance

In considering of the expenses of sales, the ratio of expenses of sales to revenue from sales specified in the Company’s financial statement in 2014 was at 18.21% which was reduced to 15.09% in 2015 which is significantly caused by an increase of revenue from export more than domestic sales. The expenses of sales ratio of export is lower than the expenses of sales ratio of domestic sales which results in a reduction of the expenses of the Company’s overall sales.

The Company’s total asset specified in the Company’s consolidated statement of financial position as of the end of 2014 and 2015 were at 1,276.7 million baht and 2,814.9 million baht respectively. The increase of overall asset was significantly caused by cash generated from sales of newly issued ordinary shares including an investment on a construction of a new factory at Rojana Industrial Park in order to increase a production capacity to support an export volume which is likely to continuously grow.

Business Operation

The cost of sales ratio in comparison with the revenue from sales specified in the Company’s financial statement in 2014 was at 66.00% and reduced to 64.56% in 2015 which is caused by a reduction of costs of raw material, an increase of production efficiency including an adjustment of loss ratio resulting to the lower production cost and a negotiation to reduce prices of seaweed and palm oil with suppliers.

Other Related Information

Annual Report 2015

Supplementary Information The Company aims TKNRF to be the distribution channel of the Company, both retail and wholesale, to consumers or retailers, survey new markets with target groups, publicizing and encouraging consumers to be aware of the Taokaenoi brand broadly. 2. NCP Trading & Supply Company Limited Type of Share Ordinary share Number of Issued Shares 10,000 shares Paid-up Capital 1.0 million Baht Ownership 100 %

Investment in Subsidiaries Currently, the Company holds shares in 3 subsidiaries as detailed below; 1. Taokaenoi Restaurant & Limited Type of Share Number of Issued Shares Paid-up Capital Ownership

Franchise Company Ordinary share 50,000 shares 35.0 million Baht 100 %

The Company established Taokaenoi Restaurant & Franchise Company Limited, “TKNRF”, as its subsidiary on November 9, 2009 in order to operate the business of Taokaenoi Land store where snacks that are the products of the Company and snacks and souvenirs from external companies are available for sale. Currently, TKNRF has 5 branches which are located in department stores and tourist attractions as follows; Terminal 21 (Asoke, Bangkok), Platinum (Pratunam Bangkok), Maya (Chiangmai) and Four Regions Floating Market (Pattaya) in Phase 1 and Phase 2. In addition, the products are also available in shops where tourists always visit in any provinces. The Company plans to open more branches of Taokaenoi Land Store in potential areas and shopping centers of tourists.

NCP Trading & Supply Company Limited, “NCP”, was listed as a company limited on August 11, 2006 in order to operate the business of manufacturing and distributing seasoning powder to the Company Group only. The Company bought all shares of NCP from the former shareholders on April 7, 2011. Currently, NCP is the manufacturer of seasoning powders which are the specific recipes developed for using in the production of processed seaweed, such as classic flavor, spicy flavor, seafood flavor and barbecue flavor. Therefore, the Company is able to develop new products with diverse flavors to the markets in order to penetrate new consumer groups and stimulate markets continuously. 3. Want More Industry Company Limited Type of Share Ordinary share Number of Issued Shares 50,000 shares Paid-up Capital 5.0 million Baht Ownership 100 % NCP Trading and Supply Company Limited, “WMI”, registered as a limited company on January 17, 2008 in order to operate the business of snack and souvenir trading. The Company bought all shares of WNI from the former shareholders on December 22, 2010 to increase opportunities in gaining more incomes to the Company. In addition, WMI is a right holder of “Want More” brand which is registered in a foreign country. Its main products are crispy bread and crispy corn.

Taokaenoi Food & Marketing Public Company Limited

Part 2 Management and Corporate Governance

Securities and Shareholders

7.1 Securities of the Company - Registered Capital 345.0 million Baht - Issued and Paid-up Capital 345.0 million Baht, consisting of 1,380 ordinary shares - Ordinary shares at par value of 0.25 Baht per share (At the Extraordinary General Shareholders Meeting held

on September 3, 2015, shareholders passed the resolution to change the par value of the Companyâ&#x20AC;&#x2122;s ordinary shares from 1 Baht per share to 0.25 Baht per share. The Company registered such change with the Ministry of Commerce on September 4, 2015.) - The Company did not issue any other types of securities other than ordinary shares.

7.2 Shareholders 1. The list of the first 10 shareholders (as of December 30, 2015) Rank

1 2 3 4 5 6 7 8 9 10

Name of Shareholder

Mr. Itthipat Peeradechanpan Peeradechapan Holding Company Limited Ms. Orrapat Peeradechapan Mr. Nutchatpong Peeradechapan Mr. Pracha Damrongsutthipong STATE STREET BANK EUROPE LIMITED Thai NVDR Company Limited* Mr. Wirote Kosonthanawong Ms. Sarunya Worawongwasu Mr. Paiboon Seriwiwattana

Number of Shares Held

462,000,000 360,000,000 99,000,000 99,000,000 84,400,000 27,733,800 25,339,400 14,000,000 11,652,500 10,500,000

Ownership (Percentage)

33.48% 26.09% 7.17% 7.17% 6.12% 2.01% 1.84% 1.01% 0.84% 0.76%

Remarks: * Thai NVDR Company Limited is a subsidiary of the Stock Exchange of Thailand which operates the business of issuing Non-Voting Depository Receipt (NVDR), a listed security by the Stock Exchange of Thailand, and offer it to investors. The income gained from the NVDR offering will be invested in the Stock Exchange of Thailand. Investors holding NVDR will receive dividend like dividend payments for shareholders of listed companies but they have no voting rights in the shareholdersâ&#x20AC;&#x2122; meeting. Information of investors in Thai NVDR Company Limited can be found on the website, www.set.or.th.

2. The list of major shareholders as of December 30, 2015 with the details of number of shares and shareholding proportion is as follows; Rank

1 2 3 4

Name of Shareholder

Mr. Itthipat Peeradechanpan Peeradechapan Holding Company Limited Ms. Orrapat Peeradechapan Mr. Nutchatpong Peeradechapan Total

3. The Company has the Foreign Limit of 49% of the paid-up capital.

Taokaenoi Food & Marketing Public Company Limited

Number of Shares Held

462,000,000 360,000,000 99,000,000 99,000,000 1,020,000,000

Ownership (Percentage)

33.48% 26.09% 7.17% 7.17% 73.91%

7.3 Dividend Payout Policy

1. The payment of interim dividends for the first half of the year was in an amount of 127.5 million Baht, accounting for the rate of 0.092 Baht per share* on August 14, 2015 (Before being listed on the SET) 2. The payment of interim dividends for 3 quarters was in an amount of 86.7 million Baht, accounting for the rate of 0.063 Baht per share* on November 18, 2015 (Before being listed on the SET) The Company will pay the final dividend totaling 144.9 million Baht accounting for the rate of 0.105 Baht per share*. The right to receive the Companyâ&#x20AC;&#x2122;s dividends is uncertain since it requires an approval from the ordinary general meeting of shareholders for the year 2016.

Annual Report 2015

Other Related Information

* The ratio of dividend per share is calculated from the number of ordinary shares as of December 31, 2015, amounting 1,380 million shares.

Financial Positions and Operating Results

The board of directors may from time to time pay to the shareholders such interim dividends if the Board estimates that the profits of the Company justify such payment. After the dividends have been paid, such dividend payment shall be reported to the shareholders at the next meeting of shareholders.

Regarding the dividend payout in 2015, the Company earned profits in the separate financial statement in an amount of 390.1 million Baht. The resolution was passed by the board of directors to propose such matter to the ordinary shareholders meeting on April 19, 2016 for an approval to pay the dividend at the rate of 0.260 Baht per share*, or accounting for 92% based on the separate financial statement. The details of such dividend payout are as follows;

Management and Corporate Governance

The dividend payout shall be pursuant to Clause 44 of the Articles of Association, stipulating that the dividend shall not be paid other than out of profits. In the case where the Company still has an accumulated loss, no dividends shall be paid. Unless otherwise provided by the Articles of Association regarding preferred stocks, dividends shall be paid according to the number of shares, with each share receiving an equal amount and payment of dividends shall be approved by the meeting of shareholders.

Payment of dividends shall be made within 1 month as from the date of the resolution of the meeting of shareholders or of the meeting of the board of directors, as the case may be, and the shareholders shall be notified in writing of such payment of dividends, and the notice shall also be published in a newspaper. Interests shall not be calculated to the Company in case such dividend payout is carried out in accordance to the law.

Business Operation

The Company has the policy of dividend payout at the rate of not less than 40% of its net profit after tax and legal reserves and other reserves (if any) according to the separate financial statements. However, such dividend payout may be changed depending on operating results, financial position, liquidity, necessity to use working capital in business operations, investment plan and business expansion plan in the future, market conditions, appropriateness and other factors relating to operations and management of the Company, provided that the Company must have sufficient cash for business operation and such operation will cause the highest benefits to shareholders as deemed appropriate by the board of directors and/or shareholders of the Company. The resolution for dividend payout approval passed by the board of directors must be proposed for an approval at the shareholdersâ&#x20AC;&#x2122; meeting, unless it is an interim dividend payout where the Board is authorized to approve and such dividend payment shall be reported to the shareholders at the next meeting of shareholders.

Management Structure Board of Directors Audit Committee

Risk Management Committee Chief Executive Officer

Internal Audit Managing DirectorInformation Technology

Managing DirectorInternational Markets Chief Sales Officer/Domestic (CSO)

Management Information System Department

Chief Financial Officer (CFO)

Chief Operating Officer (COO)

Finance Director

Production Director/ Noppawong

Quality Management Representatives (QMR)

International Trade Director

Supply Chain & Production Director/ Rojana

Marketing Director

Management Center

Administrative Director

Business Development Director

Human Resources Director

Quality Assurance Department

Engineer Director

Research & Development Department

MT Sales Director TT Sales Director

Project Development Department Safety Department

Taokaenoi Food & Marketing Public Company Limited

8.1 Board of Directors Business Operation

Mrs. Wanee Thasanamontien

Chairman of the Board of Directors / Independent Director / Member of Audit Committee

Independent Director/ Chairman of Audit Committee

Director

Director / Managing DirectorInternational Markets

Mr. Itthipat Peeradechapan

Director / Chief Executive Officer

Mr. Nutchatpong Peeradechapan Director / Managing DirectorInformation Technology

Ms. Porntera Rongkasiriphan

Director / Administrative Director

Mr. Nutchatpong Peeradechapan holds the position of Company Secretary

Annual Report 2015

Other Related Information

Ms. Orrapat Peeradechapan

Independent Director and Member of Audit Committee

Financial Positions and Operating Results

Mr. Somboon Prasitjutrakul

Mr. Chaiyong Ratanacharoensiri

Management and Corporate Governance

Mr. Yuth Vorachattarn

• Structure of Board of Directors

The Board of Directors is composed of 8 members. There are 3 independent directors, namely, Mr. Yuth Vorachattarn, Mrs. Wanee Thasanamontien and Mr. Chaiyong Ratanacharoensiri, which is pursuant to the rules of the Office of the Securities and Exchange Commission stipulating that a listed company shall have at least one-third of the total number of directors as independent directors. The Board of Directors consist of qualified members from various fields of business, such as trading and marketing, accounting and finance, which relate and support the Company’s business. The independent directors are qualified according to the requirements on qualifications of independent directors. Additionally, the Company appointed a company secretary to be responsible for giving legal advices and any rules and regulations that the Board must acknowledge and performing duties of supervising activities performed by the Board and coordinating with related parties to ensure that resolutions of the board of directors are carried out.

• Meetings of the Board of Directors

The board of directors must regularly attend the board of directors’ meeting to acknowledge and make a decision in business operations of the Company. The meeting schedule is prepared annually in advance and each director will acknowledge such schedule from the beginning of the year in order to arrange time for attending meetings. In addition, additional extraordinary meetings may be held in order to consider urgent matters. The Chairman of the Board and the Chief Executive Officer establish the agenda items and consider matters to be discussed in the board of directors’ meeting. In addition, each director has an opportunity to propose any matter as an agenda item.

Taokaenoi Food & Marketing Public Company Limited

The Chairman of the Board presiding over the meeting allocates adequate time for the meeting and offers opportunities to directors to discuss any matter indecently. The resolution of the board of directors’ meeting shall be passed by the majority votes. Each director shall be entitled to one vote. Directors having an interest with the matter discussed in the meeting shall not attend the meeting and/ or exercise the voting right on such matter. In the event of a tie vote, the chairman of the meeting shall cast a deciding vote. The Management shall attend the board of directors’ meeting in order to provide beneficial information and acknowledge policies directly for efficient compliance, unless some agendas where only directors or non-executive directors attend the meeting. This is for the purpose of independence in considering any matter. In addition, the board of directors pays attention to the management regarding conflict of interests of related parties carefully, fairly and transparently. Information of such matter is completely disclosed as well. In case any director has an interest with the discussed matter, such director shall not engage with the decision made on such matter. After the meeting, the company secretary is responsible for preparing minutes of the meeting and presenting it to the Board of Directors’ Meeting for an approval in the first agenda of the next meeting. The Chairman of the Board must affix his signature to approve the accuracy. However, directors are entitled to give opinions and request any amendment to minutes of the meeting for the most accurate details. An minutes of the meeting approved by the Meeting shall be kept systemically in a form of document and electronics together with documents supporting any agenda in order to facilitate any search and reference.

• Meeting Attendance of Board of Directors in 2015 Name of Directors

Audit Committee

Shareholders’ Meeting

15/15 15/15 15/15 15/15 15/15 12/15 11/15 14/15

6/6 6/6 6/6 -

3/3 3/3 3/3 3/3 3/3 2/3 2/3 3/3

Management and Corporate Governance

Remarks 1. Three independent directors are listed in No.1, 2 and 3 2. Three members of the Audit Committee are listed in No.1, 2 and 3 3. There are 3 shareholders’ meetings held in 2015, consisting of 3.1 2015 Ordinary General Shareholders Meeting on March 24, 2015 3.2 Extraordinary General Shareholders Meeting No.1/2015 on June 30, 2015 3.3 Extraordinary General Shareholders Meeting No.2/2015 on September 3, 2015

Business Operation

1. Mr. Yuth Vorachattarn 2. Mrs. Wanee Thasanamontien 3. Mr. Chaiyong Ratanacharoensiri 4. Mr. Somboon Prasitjutrakul 5. Mr. Itthipat Peeradechapan 6. Ms. Orrapat Peeradechapan 7. Mr. Nutchatpong Peeradechapan 8. Ms. Porntera Rongkasiriphan

Board of Directors

Financial Positions and Operating Results Other Related Information

Annual Report 2015

• Profile of Board of Directors

• Mr. Yuth Vorachattarn

Chairman of the Board of Directors / Member of Audit Committee

Age

68 Years

Education Background • Master of Economics (English Program), Thammasat University • Bachelor of Economics (Honors), Thammasat University Director Training Courses: • Ethical Leadership Program (ELP) Class 2/2015, Thai Institute of Directors • Corporate Governance for Capital Market Intermediaries (CGI) Class 0/2014, Thai Institute of Directors • Financial Institutions Governance Program (FGP) Class 6/2013, Thai Institute of Directors • Monitoring of the Quality of Financial Reporting (MFR) Class 12/2010, Thai Institute of Directors • Chartered Director Class (R-CDC) Class 3/2008, Thai Institute of Directors • Role of the Chairman Program (RCP) Class 8/2003, Thai Institute of Directors • Directors Certification Program (DCP) Class 0/2000, Thai Institute of Directors Family Relationship with Directors and Executives (No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

(No) (No)

Work Experiences for the Previous 5 years 2011 – Current 2010 – Current 2010 – Current 2003 – Current 2003 – Current 2004 – 2015 2004 – 2015

Chairman of the Board of Directors / Taokaenoi Food & Marketing PCL Member of Audit Committee Director TSFC Securities PCL Director / Chairman of the Audit Committee Saha Thai Steel Pipe PCL Chairman of the Board of Directors / Maybank Kim Eng Securities (Thailand) PCL Member of the Audit Committee Chairman of the Board of Directors Kim Eng Securities (Thailand) Co., Ltd Chairman of the Board of Directors Siam Commercial Leasing PCL Chairman of the Board of Directors Preecha Group PCL

Taokaenoi Food & Marketing Public Company Limited

Business Operation

• Mrs. Wanee Thasanamontien

Director / Chairman of Audit Committee

Age

61 Years Management and Corporate Governance

Education Background • Master of Public Administration, Chulalongkorn University • Bachelor of Laws, Thammasat University • Bachelor of Accounting, Thammasat University Director Training Courses: • Advanced Audit Committee Program (AACP) Class 18/2015, Thai Institute of Directors • Financial Institutions Governance Program (FGP) Class 4/2012, Thai Institute of Directors • Directors Certification Program (DCP) Class 138/2010, Thai Institute of Directors

(No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

Financial Positions and Operating Results

Family Relationship with Directors and Executives

(No) (No)

Work Experiences for the Previous 5 years 2014 - Current 2010 - 2014 2010 - 2014 2014 - 2014 2011 - 2013

Director / Chairman of the Audit Committee Principal Advisor on Strategic Tax Administration Representative Director of Ministry of Finance Representative Director of Ministry of Finance Representative Director of Ministry of Finance

Taokaenoi Food & Marketing PCL Revenue Department of Thailand Water Management Authority of Thailand Thailand Institute of Scientific and Technological Research Small and Medium Enterprise Development Bank of Thailand

Other Related Information

Annual Report 2015

• Mr. Chaiyong Ratanacharoensiri

Director / Chairman of Audit Committee

Age

60 Years

Education Background • Master of Management (Finance), Scranton University, USA • Bachelor of Engineering, Chulalongkorn University Director Training Courses: • Directors Certification Program (DCP) Class 58/2005, Thai Institute of Directors • Directors Accreditation Program (DAP) Class 34/2005, Thai Institute of Directors Family Relationship with Directors and Executives (No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

(No) (No)

Work Experiences for the Previous 5 years 2011 - Current 1998 – 2014 2013 - 2013

Director / Member of the Audit Committee Vice President Director

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing PCL Bangkok Bank Public Company Limited Rosant Biological Technology PCL

Business Operation

• Mr. Somboon Prasitjutrakul Director

Age

57 Years Management and Corporate Governance

Education Background • Master of Business Management, Sasin Graduate Institute of Business Administration • Bachelor of Marketing, San Jose State University, USA Director Training Courses: • Directors Certification Program (DCP) Class 54/2005, Thai Institute of Directors Family Relationship with Directors and Executives (No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

(No) (No)

Financial Positions and Operating Results

Work Experiences for the Previous 5 years 2013 – Current 2015 - Current 2014 - Current 2014 – Current 2014 – Current

Director Director Director Director Director

Taokaenoi Food & Marketing PCL T.A.C Consumer Co., Ltd Riverpro Pulp and Paper Co., Ltd. Thanatarn Paper Co., Ltd. Ippudo (Thailand) Co., Ltd.

Other Related Information

Annual Report 2015

• Ms. Porntera Rongkasiriphan Director / Administrative Director

Age

46 Years

Education Background • Bachelor of Accounting, Assumption University Director Training Courses: • Directors Accreditation Program (DAP) Class 86/2010, Thai Institute of Directors Family Relationship with Directors and Executives (No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

(No) (No)

Work Experiences for the Previous 5 years 2012 - Current 2008 - 2012

Director / Administrative Director Director / Accounting and Finance Director

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing PCL Taokaenoi Food & Marketing Co., Ltd.

Business Operation

• Mr. Itthipat Peeradechapan Director / Chief Executive Officer

Age

31 Years Management and Corporate Governance

Education Background • Bachelor of Entrepreneur, University of the Thai Chamber of Commerce Director Training Courses: • Directors Accreditation Program (DAP) Class 86/2010, Thai Institute of Directors Family Relationship with Directors and Executives

Held by Self Held by Self (Indirectly through Holding Company) Held by Spouse/Minor Child

462,000,000 shares (Accounting for 33.48%) 252,000,000 shares (Accounting for 18.26%)

Financial Positions and Operating Results

Younger brother of Mr. Nutchatpong Peeradechapan Younger brother of Ms. Orrapat Peeradechapan

Number of Ordinary Shares Held

(No)

Work Experiences for the Previous 5 years Director / Chief Executive Officer Director Director Director Director Director Director Director Director Director Director

Taokaenoi Food & Marketing PCL Peeradechapan Holding Co., Ltd. Chubcheeva Co., Ltd. Omise Co., Ltd.. Tokyo Runway Marketing Co., Ltd.. Dr. Tobi Co., Ltd. Twenty Four Projects Co., Ltd. Taokaenoi Restaurant & Franchise Co., Ltd. Want More Industry Co., Ltd. NCP Trading and Supply Co., Ltd Gen C Inspire Corporation Co., Ltd.

Other Related Information

2004 - Current 2014 - Current 2014 - Current 2014 - Current 2013 - Current 2010 - Current 2009 - Current 2009 – Current 2008 - Current 2004 - Current 2012 – 2015

Annual Report 2015

• Ms. Orrapat Peeradechapan

Director / Managing Director-International Markets

Age

34 Years

Education Background • Master of Business Management, Ramkhamhaeng University • Bachelor of Service Industry, Rangsit University Director Training Courses: • Directors Accreditation Program (DAP) Class 86/2010, Thai Institute of Directors Family Relationship with Directors and Executives Younger sister of Mr. Nutchatpong Peeradechapan Elder sister of Mr. Itthipat Peeradechapan

Number of Ordinary Shares Held Held by Self Held by Self (Indirectly through Holding Company) Held by Spouse/Minor Child

99,000,000 shares (Accounting for 7.17%) 54,000,000 shares (Accounting for 3.91%) (No)

Work Experiences for the Previous 5 years 2004 - Current 2014 - Current 2010 - Current 2009 - Current 2009 – Current 2008 - Current 2004 - Current

Director / Managing Director-International Markets Director Director Director Director Director Director

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing PCL Peeradechapan Holding Co., Ltd. Dr. Tobi Co., Ltd. Twenty Four Projects Co., Ltd. Taokaenoi Restaurant & Franchise Co., Ltd. Want More Industry Co., Ltd. NCP Trading and Supply Co., Ltd

Business Operation

• Mr. Nutchatpong Peeradechapan

Director / Managing Director-Information Technology

Age

36 Years

Director Training Courses: • Directors Accreditation Program (DAP) Class 86/2010, Thai Institute of Directors Family Relationship with Directors and Executives Held by Self

99,000,000 shares (Accounting for 7.17%)

Held by Self (Indirectly through Holding Company) Held by Spouse/Minor Child

54,000,000 shares (Accounting for 3.91%) (No)

Work Experiences for the Previous 5 years Director / Managing Director-Information Technology Director Director Director Director Director Director Director Director Director

Taokaenoi Food & Marketing PCL Peeradechapan Holding Co., Ltd. Dr. Tobi Co., Ltd. Thai Forward Building Co., Ltd. Twenty Four Projects Co., Ltd. Taokaenoi Restaurant & Franchise Co., Ltd. Want More Industry Co., Ltd. NCP Trading and Supply Co., Ltd. Indy Badger Co., Ltd. Gen C Inspire Corporation Co., Ltd.

Annual Report 2015

Other Related Information

2004 - Current 2014 - Current 2010 - Current 2010 - Current 2009 - Current 2009 – Current 2008 - Current 2004 - Current 2014 - 2015 2012 – 2015

Financial Positions and Operating Results

Elder brother of Ms. Orrapat Peeradechapan Elder brother of Mr. Itthipat Peeradechapan

Number of Ordinary Shares Held

Management and Corporate Governance

Education Background • Bachelor of Science in Industrial Education, King Mongkut’s University of Technology North Bangkok

8.2 Executives of Company The Board of Directors comprises of 5 directors as follows;

Mr. Itthipat Peeradechapan Chief Executive Officer

Ms. Orrapat Peeradechapan Managing DirectorInternational Markets

Mr. Jirapong Suntipiromkul Chief Financial Officer

Taokaenoi Food & Marketing Public Company Limited

Mr. Nutchatpong Peeradechapan

Managing DirectorInformation Technology

Mr. Boonchai Kowpanich Chief Operating Officer

• Profile of Board of Directors Business Operation

• Mr. Itthipat Peeradechapan Chief Executive Officer

Age

31 Years Management and Corporate Governance

Education Background • Bachelor of Business Administration Program in Entrepreneur, University of the Thai Chamber of Commerce Director Training Courses: • Directors Accreditation Program (DAP) Class 86/2010, Thai Institute of Directors Family Relationship with Directors and Executives

Held by Self Held by Self (Indirectly through Holding Company) Held by Spouse/Minor Child

462,000,000 shares (Accounting for 33.48%) 252,000,000 shares (Accounting for 18.26%)

Financial Positions and Operating Results

Younger brother of Mr. Nutchatpong Peeradechapan Younger brother of Ms. Orrapat Peeradechapan

Number of Ordinary Shares Held

(No)

Work Experiences for the Previous 5 years Director / Chief Executive Officer Director Director Director Director Director Director Director Director Director Director

Other Related Information

2004 - Current 2014 - Current 2014 - Current 2014 - Current 2013 - Current 2010 - Current 2009 - Current 2009 – Current 2008 - Current 2004 - Current 2012 – 2015

Annual Report 2015

• Ms. Orrapat Peeradechapan

Managing Director-International Markets

Age

34 Years

Number of Ordinary Shares Held Held by Self Held by Self (Indirectly through Holding Company) Held by Spouse/Minor Child

99,000,000 shares (Accounting for 7.17%) 54,000,000 shares (Accounting for 3.91%) (No)

Work Experiences for the Previous 5 years 2004 - Current 2014 - Current 2010 - Current 2009 - Current 2009 – Current 2008 - Current 2004 - Current

Director / Managing Director-International Markets Director Director Director Director Director Director

Taokaenoi Food & Marketing Public Company Limited

Business Operation

• Mr. Nutchatpong Peeradechapan

Managing Director-Information Technology

Age

36 Years

Director Training Courses: • Directors Accreditation Program (DAP) Class 86/2010, Thai Institute of Directors Family Relationship with Directors and Executives Held by Self

99,000,000 shares (Accounting for 7.17%)

Held by Self (Indirectly through Holding Company) Held by Spouse/Minor Child

54,000,000 shares (Accounting for 3.91%) (No)

Work Experiences for the Previous 5 years Director / Managing Director-Information Technology Director Director Director Director Director Director Director Director Director

Annual Report 2015

Other Related Information

2004 - Current 2014 - Current 2010 - Current 2010 - Current 2009 - Current 2009 – Current 2008 - Current 2004 - Current 2014 - 2015 2012 – 2015

Financial Positions and Operating Results

Elder brother of Ms. Orrapat Peeradechapan Elder brother of Mr. Itthipat Peeradechapan

Number of Ordinary Shares Held

Management and Corporate Governance

Education Background • Bachelor of Science in Industrial Education, King Mongkut’s University of Technology North Bangkok

• Mr. Jirapong Suntipiromkul Chief Financial Officer

Age

54 Years

Education Background • Master of Accounting, Chulalongkorn University • Bachelor of Accounting, The University of the Thai Chamber of Commerce Director Training Courses: • (No) Family Relationship with Directors and Executives (No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

Work Experiences for the Previous 5 years 2013 - Current 2011 - 2013 2007 - 2010

Chief Financial Officer Senior GM Finance & HR Vice President of Finance

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing PCL Thai Suzuki Motor Co., Ltd. General Electronics International Co., Ltd.

(No) (No)

Business Operation

• Mr. Boonchai Kowpanich Chief Operating Officer

Age

54 Years Management and Corporate Governance

Education Background • Master of Business Administration, Kasetsart University • Bachelor of Science, Chulalongkorn University Director Training Courses: • (No) Family Relationship with Directors and Executives (No)

Number of Ordinary Shares Held Held by Self Held by Spouse/Minor Child

(No) (No)

Financial Positions and Operating Results

Work Experiences for the Previous 5 years 2013 - Current 2004 - 2013

Chief Operational Officer Supply Chain Director

Taokaenoi Food & Marketing PCL Mead Johnson Nutrition Co., Ltd.

Other Related Information

Annual Report 2015

8.3 Remuneration of Directors and Executives Remuneration of Directors

The 2015 Ordinary General Meeting of Shareholders on March 24, 2015 approved remunerationrates for the

directors in a form of monthly remuneration in an amount of not exceeding 1,900,000 Baht per year. The bonus from the performances in 2014 was paid in an amount of 296,000 Baht, totaling 2,196,000 Baht, as detailed below; Unit: Baht per Month

Position

Year 2013

Year 2014

Year 2015*

Chairman of the Board

40,000

48,000

53,000

Director

20,000

24,000

26,500

Chairman of the Audit Committee

10,000

Member of the Audit Committee

5,000

Remarks: * Such remuneration rate was effective in March, 2015.

In 2015, the Board of Directors received remuneration totaling 2,061,000 Baht, as detailed below; Remuneration (Baht) Name of Director

Board of Directors

Audit Committee

Bonus paid in 20151

Mr. Yuth Vorachattarn

626,000

50,000

96,000

772,000

Mrs. Wanee Thasanamontien

313,000

100,000

12,000

425,000

Mr. Chaiyong Ratanacharoensiri

313,000

50,000

48,000

411,000

Mr. Somboon Prasitjutrakul

313,000

140,000

453,000

Mr. Itthipat Peeradechapan2

Ms. Orrapat Peeradechapan2

Mr. Nutchatpong Peeradechapan2

Ms. Porntera Rongkasiriphan2

1,565,000

200,000

296,000

2,061,000

Total

Remarks: 1. In 2015, directors receives remuneration as a bonus other than the monthly remuneration. 2. Such directors receive remuneration as an executive only (Not receive as a director).

Remuneration of Executives

According to the Notification of the Office of SEC No. ThorChor.23/2008, the term of â&#x20AC;&#x153;executiveâ&#x20AC;? refers to the manager or the next four executives succeeding the manager, who holds equivalent position to the fourth executive and shall include the persons holding the position of manager or equivalent in accounting or finance departments.

Total

Taokaenoi Food & Marketing Public Company Limited

According to the organization structure in 2015, there are 5 executives in accordance with the Notification of the Office of SEC, comprising of chief executive officer, Managing Director-International Markets, Managing Director-Information Technology, chief financial officer and chief operational officer. Such executives receive remuneration in a form of salary, bonus and other remunerations, totaling 24.3 million Baht.

Other Remunerations

Term of Service

the Company being at the rate 5 per cent of the salary. In 2013, the Company made contributions to the provident fund for a total of 4 executives, totaling 0.40 million Baht. Members will pay the contribution to the fund by allowing the employer to deduct it from their wages at the rate of 3-7% of their wages. Employers are obliged to pay the contribution to the fund on the same date that members pay the contribution to the fund with the following rate of wages; Contribution Rate of Employer (Percentage)

From 3 years but not over 7 years

7 years or higher

Additionally, the Company has set the reserve for long-term benefits of employees which is the compensation after resignation pursuant to laws. It is estimated based on actuarial science.

The Company focuses on the personnel development in the organization. The Company realizes that employees are the most valuable resource. To develop employees is the worthwhile investment in order to build business competitiveness in long term. All employees at all levels and professions will be sufficiently and continuous developed

As of December 31, 2015, there are 2,767 employees in the Company as detailed below; Number of Employees of Company and its Affiliates

Daily Employee

Total

522

2,162

2,684

Taokaenoi Restaurant & Franchise Co., Ltd.

NCP Trading & Supply Company Limited

584

2,183

2,767

Taokaenoi Food & Marketing PCL

Total

Annual Report 2015

Other Related Information

Monthly Employee

Financial Positions and Operating Results

Policy on Personnel Development

in terms of business knowledge and management based on appropriateness of their duties and responsibilities. In addition, the Company also builds awareness of quality to all employees. The Company promotes all employees to participate in managing the Company to become the learning organization. All training courses are improved and updated regularly. However, training and personnel development is considered to the responsibility of supervisors in the organization which requires cooperation.

Management and Corporate Governance

Less than 3 years

8.4 Personnel

Business Operation

Other Remunerations of Directors (No) Other Remunerations of Executives The Company has established a provident fund by registering the pooled fund with Krung Thai Master Pooled Fund. Krung Thai Asset Management Public Company Limited is the Fund Manager. All employees and executives are entitled to apply the membership. Members will pay the contribution of

Corporate Governance

9.1 Corporate Governance Policy The Company is aware of an importance of good corporate governance according to the principles set by the Stock Exchange of Thailand. All directors, executives and employees must comply with the good corporate governance principle. In addition, the board of directors has also established the policy on corporate governance which covers the following areas; 1. The Board of Directors, executives and employees are all committed to applying 6 important principles of good corporate governance of the Company as follows; 1.1 Accountability: Being accountable for their own decision and action and such decision must be explainable 1.2 Responsibility: Being responsible for their duties with sufficient capability and efficiency 1.3 Equitable Treatment: Treating all stakeholders equally with fairness 1.4 Transparency: Operating business, which must be traceable, and disclosing information transparently to related parties 1.5 Vision to create long term value: Envisioning the creation of long-term added value to the organization 1.6 Ethics: Operating business with ethics and code of conduct and enabling the management structure that holds relationship among the Board of Directors, executives and shareholders with fairness. 2. The Board of Directors has important roles in determining the Company’s vision, strategies, policies, and action plans by considering risk factors and setting appropriate management guidelines. Furthermore, the Board must ensure that the accounting system, financial report and audit are reliable.

Taokaenoi Food & Marketing Public Company Limited

3. The Board of Directors establishes ethics of the Company so that the Board of Directors, executives, employees and workers can apply it as practice guidelines, along with Articles of Association 4. Providing the Company’s shareholders and stakeholders with sufficient, reliable financial and nonfinancial disclosure in timely manner equally, establishing the Investor Relations Department and the Public Relations Department to be responsible for disclosing information to investors and the public 5. Shareholders and stakeholders will be treated equitably and fairly and entitled to information accessibility and suitable communication channels with the Company 6. Providing appropriate system for selecting and recruiting personnel to hold positions in all important executive levels with transparent and fair recruitment procedures To ensure transparent operations, enhance the management and increasing confidence of shareholders, general investors, and all related parties in long term, the Company has categorized the practices into 5 areas as follows;

9.1.1 Right of Shareholders

The Company is aware of importance and the rights in the corporate ownership of all shareholders. They supervise the Company through the appointment of the Board of Directors to perform duties on their behalf and have the rights to make a decision relating to major changes of the Company. The Company encourages shareholders to exercise their rights based on basic rights of shareholders, such as voting rights, the rights to appoint proxy, the right to sell or transfer stocks, the sharing of company’s profits, the right to obtain the adequate information of the Company, the voting right in the shareholders’ meeting to appoint or to demote the directors, the rights to appoint a certified auditor, and the right to make major decisions which possibly affect the Company, such as dividend allocation, amendment or modification

2.3 The Company arranges independent persons to count or inspect votes in the ordinary general shareholders meeting and the extraordinary general shareholders meeting, and discloses them to the Meeting and records in the minutes of the meeting.

1. Shareholders’ Meeting 1.1 The Company will disclose policies supporting or promoting all shareholders, including institutional shareholders to attend the shareholders’ meeting.

2.4 The Company provides ballot tickets in major agenda item for the purpose of transparency and auditability in case of an objection occurring thereafter.

1.3 The Company will facilitate shareholders to exercise the right to attend the meeting and voting right and must not perform any act that restricts shareholders from attending the meeting

1.5 The Company will support shareholders to use a proxy form on which shareholders can dictate the direction of their voting through proxies and should nominate at least one independent director as an alternative proxy for shareholders.

2.2 At the shareholders’ meeting, voting is made separately for each item in the case of several items in an agenda, such as the agenda on appointment of directors.

3.2 The Company discloses to the public the voting results of each agenda of the ordinary general shareholders meeting and the extraordinary general shareholders meeting on its website. 4. Rights to approve and remove directors and determine remuneration of directors Appointment of Directors 4.1.1 The Company offers opportunities to shareholders to exercise their rights for electing individual directors by nominating persons to assume the position of a director at the shareholders’ meeting and also profile of each nominated director and any information beneficial to shareholders for consideration and approval. Annual Report 2015

Other Related Information

2. Procedures on the date of the shareholders’ meeting 2.1 The Company offers opportunities to shareholders to pose questions to the chairman of various subcommittees on matters in which they are involved

3. Preparation and Disclosure of the Resolutions of the Shareholders’ Meetings 3.1 The minutes of shareholders’ meeting record the explanation of the voting and vote counting procedures used to the meeting prior to commencement of the meeting, as well as the opportunity provided for the shareholders to raise issues or questions. It also records the questions and answers, the voting results for each agenda item of the number of shareholders approving, dissenting and abstaining and the list of directors who is present or absent from the meetings.

Financial Positions and Operating Results

1.4 The Company offers opportunities to shareholders to submit questions prior to the meeting by clearly determining rules and then informs and sends the invitation letter to notify shareholders of rules of meeting, voting procedures and also publishes such information on the Company’s website in advance.

2.6 The Board of Directors encourages the Company to apply technology to the shareholders’ meetings, including registration of the attending shareholders and vote counting and reporting, so that the meeting can be conducted quickly, accurately and precisely

Management and Corporate Governance

1.2 The Company will provide information, dare, time, venue and meeting agenda, including information supporting the meeting in detail to shareholders prior to the meeting as well as all information relating to items required decision in the meeting adequately and timely.

2.5 The Chairman of the Meeting offers opportunities to shareholders to express opinions and pose questions to the Meeting on matters in which the Company is involved.

Business Operation

of Articles of Association and Memorandum of Association, capital increase or decrease, and approval of special issues, etc. In addition, the Company also establishes policies and practice guidelines to support and facilitate shareholders to exercise their rights as follows;

4.1.2 According to the Articles of Association, at every shareholder’s meeting, one-third of the directors shall retire. The directors who have been in office the longest shall retire first. However, the retired directors may be re-elected. 4.2 Removal of Directors Removal of any directors before the expiration of the director’s term of office must be in accordance with specified laws and the Articles of Association by the votes of not less than three-fourths of the number of shareholders attending the meeting and having the right to vote and the total number of shares being not less than half of the number of shares held by the shareholders attending the meeting and having the right to vote. 4.3 Determination of Remuneration for Directors Shareholders are entitled to consider and determine, monetary and/or non- monetary, remuneration of directors, and then approve it every year, including propose rules and policy on determining, monetary and/or non- monetary, remuneration of director of each position. 5. Rights to approve the appointment of certified auditor and determine audit fee The appointment of a certified auditor and the determination of the audit fee must be approved by shareholders at the ordinary general shareholders’ meeting every year. The certified auditor must be independent and approved by the Security and Exchange Commission. The Company will attach details of auditors nominated for appointment, their companies, experience and expertise, independence, number of years that such auditor acts as the Company’s auditor (in case of re-appointment) and fee for auditor and/or other service charges (if any) together with invitation letter and also publish such information on the Company’s website, so that shareholders are able to consider appropriateness of auditors prior to an approval. 6. Rights to obtain a share of profit The Company will set the profit allocation to shareholders in a form of dividend which must be approved by shareholders at the ordinary general shareholders’ meeting every year.

Taokaenoi Food & Marketing Public Company Limited

In addition, according to the Public Limited Company Act and the Articles of Association, it stipulates that “the board of directors may from time to time pay to the shareholders interim dividends if the Board estimates that the profits of the Company justify such payment. After the dividends have been paid, such dividend payment shall be reported to the shareholders at the next meeting of shareholders.” However, such dividend/interim dividend payout depends on the investment plan and business expansion plan of the Company, financial position and operating results, as well as necessity and appropriateness. 7. Rights to obtain information, news, operating results and management policy regularly and timely The Company has the policy to disclose information to shareholders transparently, accurately and completely without any discrimination .All shareholders are entitled to access and obtain information, news, operating results and management policy of the Company sufficiently, regularly, timely and equally. They can contact the Company or receive information via these following channels;

- Channels of the Stock Exchange of Thailand - Company’s website : http://www.taokaenoi.co.th - Analyst Site Visit Project - Press Conference / Press Release - Activities organized by the Stock Exchange of Thailand, etc.

9.1.2 Equitable Treatment of Shareholders

The Board of Directors respects the rights of all shareholders equitably. The Company has the policy to disclose news and information of the Company completely, accurately and transparently, including rights of shareholders and any matters affecting the Company, as follows; - The Company will hold the shareholders’ meeting in accordance with laws and shareholders’ meeting guidelines as specified by the unit supervising the shareholders’ meeting. The Company will notify the meeting’s schedule and agenda, including opinions of directors towards the Stock Exchange of Thailand

- All shareholders are entitled to propose additional agenda in advance prior to the date of shareholders’ meeting for the fairness and transparency in considering whether the agenda item proposed by shareholders should be added.

- The Company will arrange for use of ballots on every agenda item which requires vote casting for transparency and inspection can be made in case an objection occurs thereafter. In addition, votes must be counted and the vote results and resolutions of the meeting shall be disclosed clearly in the minutes of meeting.

- The directors and executives of the Company must disclose information relating to their interests and related parties so that the Board of Directors can consider transactions of the Company that may cause conflicts of interest and make a decision for benefits of the Company. However, directors and executives gaining interests from transactions of the Company

9.1.3 Roles of Stakeholders

The Company established the policy on treatment of stakeholders and considered the rights of internal and external stakeholders. As a result, stakeholders should be treated by the Company based on their related legal rights. The Board of Directors should consider and provide the process that promotes the cooperation between the Company and stakeholders in order to create prosperity, financial stability and sustainability of businesses. In the corporate governance system, there are various major stakeholders such as customers, employees, trading partners, shareholders or investors, creditors and communities where the Company is located in, societies or the public state, and other stakeholders such as competitors, etc. The Board of Directors has established the policy on treatment of stakeholders by considering rights of such stakeholders based on laws or agreements made with the Company. However, the Company discloses important information fairly, timely, and transparently to all stakeholders so that they are treated equally. Additionally, the Company also provides channels for accepting complaints or suggestions or comments showing that stakeholders are affected or possibly affected by business operations of the Company or any illegal or immoral act of its employees, including behaviors relating to corruption, inequitable treatment or negligent act, leading to damages to stakeholders. The Company will investigate procedures and record the investigation in writing and conceal whistle blowers, as well as keep all complaint confidential in order to protect whistle blowers from any potential impact.

Annual Report 2015

Other Related Information

- The Company offers opportunities to shareholders to nominate persons to assume the position of a director in advance and allows shareholders to vote on individual directors.

- The directors and executives are not allowed to take opportunities or use information obtained from being a director or executive in order to seek benefits for their own benefits or any third parties, such as securities trading by using internal information, disclosing internal information to persons related to directors and executives which is exploitation or may cause damages to overall shareholders, etc.

Financial Positions and Operating Results

- The shareholders’ meeting must be conducted according to the agenda order outlined in the meeting invitation letter and will not add any agenda item apart from those specified in the invitation letter for the fairness of shareholders who do not attend the meeting.

- The directors and executives of the Company must report the holding of securities as prescribed by laws and submit such report to the Board of Directors regularly, including disclose information in the annual report.

Management and Corporate Governance

- All shareholders are fairly entitled to acquire information, express opinions, and propose questions to the Meeting in accordance with the agenda and proposed matters. The Chairman of the meeting is responsible for allocate adequate time and encourage shareholders to express opinions and propose questions in the meeting.

should not engage in the decision-making of such transactions. Business Operation

and then publish on the Company’s website in Thai and English more than 28 days prior to the meeting. In addition, the Company will inform shareholders of rules of meeting, voting procedures and rights of voting based on type of shares.

1. Shareholders The Company is committed to being responsible and creating highest satisfaction to shareholders, considering the sustainable growth of the Company and offering appropriate returns continuously. In addition, the Company operates its business to constantly gain good operating results and unceasingly develops the business with transparent operation, reliable accounting system, control and internal audit system. The Company has set guidelines for directors, executives and employees in the Company Groupâ&#x20AC;&#x2122;s business ethics to ensure that there is transparency and fairness to various stakeholders. The details of ethics on treatment of shareholders are as follows: Ethics on Treatment of Shareholders The Board of Directors has guidelines on equitable and fair treatment of shareholders as follows: 1. Performing duties and conducting business with integrity, transparency and accountability to shareholders on a regular basis, disclosing accurate, complete and standard information to shareholders under the legal framework, business ethics and good corporate governance principles 2. Managing the business of the Company to steadily progress by applying full knowledge, skills and experiences and making decisions with integrity, honesty, duty of care and fairness for the highest benefits of the shareholders 3. Supervising operations to ensure that the Company has appropriate financial status and management to protect and increase interests of shareholders 4. Taking due care and managing the Companyâ&#x20AC;&#x2122;s assets to prevent impairment, loss or damage without reasonable cause 5. Not exploiting oneself and related persons by disclosing internal information of the Company that is confidential and/ or has not been yet disclosed to the public or outsiders which may cause negative impacts to the Company

Taokaenoi Food & Marketing Public Company Limited

6. Respecting the rights of shareholders by reporting status and operating results of the Company as well as information to all shareholders equally, regularly, timely, accurately and completely based on facts, providing sufficient supporting documents in accordance with the requirements as prescribed by the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission 7. Not performing any acts in a manner which may cause conflicts of interest to the Company without notifying the Company 2. Employees Employees are the most valuable resource of the organization; therefore, the Company is committed to building the fair human resources management and performance evaluation system. The Company recruits and maintains skilled and experienced employees and also aims to develop and enhance their skills continuously, including treat all employees equally. Guidelines for treatment of employees are as follows: 1. Treating employees with respect for their honor, dignity and human rights 2. Appointing, transferring, rewarding as well as punishing employees with sincerity and based on their knowledge, competence, appropriateness and fairness without any discrimination 3. Assessing staff performances and progresses regularly 4. Providing remuneration of various types to employees fairly and appropriately based on their knowledge, competence, experience, positions, responsibilities and individual performance which are taken into consideration in line with the operating results of the Company, economic and social conditions 5. Providing appropriate welfare and other benefits for employees that are comparable to those of other companies in the same or similar business and as prescribed by law, such as provident fund, etc.

7. Regularly maintaining a good working environment for health and safety to life and properties of employees 8. Providing appropriate facilities and welfare for disabled employees

11. Supporting employees to work under mutual culture and good value and encouraging unity spirits in the organization 12. Managing works with prudence and avoiding any unfair actions which may cause impact on the job security of employees 13. Complying with rules and regulations relating to labor law (such as employment, termination of employment) and welfare of employees

1. RespondingÂ the needs of customers with good quality of products and services with reasonable prices and qualified employees as well as state-of-the-art

4. Providing procedures which customers are able to report problems of product use or inappropriate services via e-mail or call center so that the Company will prevent/ resolve problems for the customers quickly and appropriately and apply such information to improve or develop such products or services 5. Supporting activities which promote and maintain good and sustainable relationship between customers and the Company 4. Trading Partners, Competitors and Creditors The Company adheres to equity and integrity in conducting business and mutual benefits based on good ethics, strictly complies with laws, rules and conditions agreed with contract counterparts, builds trading alliances, and maintains good relationship with all parties. Ethics on Treatment of Trading Partners The Board of Director treats trade partners equally and considers mutual benefits. Guidelines for treatment toward trading partners are as follows: 1. Treating trading partners equally, fairly and based on fair returns acceptable to both parties 2. Strictly complying with agreements or conditions mutually agreed upon; and in case of non-compliance with one of any conditions, a notice must be submitted to trading partners immediately to jointly seek solutions on a rationality basis

Annual Report 2015

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3. Customers The Company is committed to creating satisfaction and responding customersâ&#x20AC;&#x2122; demands so that they receive good and fair products and services with reasonable prices. Guidelines for treatment towards customers and consumers are as follows:

3. Providing information which is accurate, sufficient and beneficial to decision-making on products and/or services of consumers by not intentionally concealing information or giving false information to mislead consumers about the quality, quantity, or conditions of such products or services

Financial Positions and Operating Results

10. Promoting participation of employees and respecting the rights of employee assembly to propose or set working guidelines and/or agreements to create benefits for all parties and good working relationship, including channels to complain any offences, investigation approaches and whistle blower protection

2. Regularly studying, assessing and improving impact of products and/or services which may occur to consumers and monitoring and supervising products and services to have quality and meet standards, requirements, consumer protection laws or other relevant laws

Management and Corporate Governance

9. Supporting employees to have better quality of life and promoting development of life and well-being of employeesâ&#x20AC;&#x2122; families so that they will live happily and are able to rely on themselves sustainably according to the philosophy of sufficiency economy

innovation and technology

Business Operation

6. Supporting and focusing on importance of knowledge, skill and competency development which is beneficial to employees at all levels for their progresses in career path

3. Not requesting for or accepting assets or other benefits which are dishonest to trading with trading partners 4. In case there are grounds to believe that there is a request or acceptance of assets or other benefits which are dishonest, information must be disclosed to trading partners to jointly seek solutions without delay 5. Providing a policy or measures for inspecting and screening trading partners of the Company such as manufacturers and contractors and also supporting businesses made with trading partners who conduct business fairly without violating human rights and realizing the importance of social responsibility 6. Not giving cooperation to or supporting any persons or organizations which conduct illegal business or are a threat to the society and national security 7. Being committed to maintaining sustainable relationship with trading partners and contract counterparts on the basis of mutual trust Ethics on Treatment of Competitors The Board of Directors conducts business under a framework of free and fair competition. Guidelines for treatment toward competitors are as follows: 1. Treating competitors according to the rule and manner of good and fair competition 2. Not intentionally destroying reputation of competitors with groundless slander without referred information 3. Not performing any acts which breach intellectual property and copyright of any third parties or competitors Ethics on Treatment of Creditors The Board of Directors is committed to conducting business to create creditability for creditors. Guidelines for treatment toward creditors are as follows;

Taokaenoi Food & Marketing Public Company Limited

1. Strictly complying with agreements or conditions mutually agreed upon, including obligations and liabilities; in case of non-compliance with one of any conditions or default, a notice must be submitted to creditors immediately to jointly seek solutions on a rationality basis without revealing facts 2. Managing an appropriate capital structure in order to support the Companyâ&#x20AC;&#x2122;s business operation and maintaining creditor confidence 3. Not giving cooperation to or supporting any persons or organizations which conduct illegal business or are a threat to the society and national security 4. Being committed to maintaining sustainable relationship with creditors on the basis of mutual trust 5. Community, Society and Environment The Company has conducted the business with social and environmental responsibility so it is aware of, care and considers the safety of communities and quality of life of the public and society regularly. The Company adheres to operate the business with responsibility and pay attention to overall communities, society and environment and also comply with relevant laws and regulations. The Company has operated its business along with the prevention and mitigation of impacts or potential impacts on communities and environment. The policy/practice guidelines on treatment of community, society and environment are as follows; In this regards, the Company will disclose activities which represent the compliance of such policy/practice guidelines and also prepare the corporate social responsibility report of the Company included in or separated from the annual report as deemed appropriate. 1. Supporting provision of knowledge and training for employees at all levels to build the awareness of responsibility toward community, environment and society and encouraging employees to participate in activities organized by the Company 2. Having social participation by supporting and promoting activities which maintain good tradition and culture and behaving as a good religion follower by supporting religious activities consistently

3. Participating in supporting activities relating to education, sport capabilities, development of professional knowledge, for sustainable selfdependence

- The company will discose at least the following information on the company’s website:

4. Having social responsibility relating to public benefits, maintenance of the environment and development of the community as well as creative projects to promote and support well-being of people in communities

2. The company’s business operation characteristics.

8. Not cooperating with or support any persons or organizations conducting illegal business or being a threat to the society and national security 9. Complying or monitoring to ensure strict compliance with relevant regulations and laws

9.1.4 Disclosure of Information and Transparency

5. Downloadable Form 56-1 and annual reports. 6. Any other information or documents presented to analysts, fund managers or other media by the company. 7. Direct and indirect shareholding structure. 8. Corporation structure including subsidiaries, affiliated companies, joint ventures and special purpose enterprises/vehicles (SPEs/SPVs). 9. Direct and indirect major shareholders holding shares from five percent of all distributed shares who have the right to vote. 10. Shares held directly and indirectly by directors, major shareholders and high-ranking executives. 11. Invitations to general shareholders’ meetings and special shareholders’meetings. 12. Company regulations, memorandums of association and agreements of shareholder groups (if any).

Other Related Information

The company recognizes the importance of disclosing significant information belonging to the company with accuracy, completeness, up-to-date information, transparency, directness and accountability within an appropriate time to benefit investment and management decision-making including any operations for all stakeholders. Therefore, the company is obligated to provide information for all related parties with fairness, information that is appropriate, accurate, reliable, up-to-date and equal access to information for all stakeholder groups via various channels such as the Stock Exchange of Thailand, the annual information form (Form 561), annual reports and various media, including the company’s website with the following policy/practice guidelines toward the community, the environment and overall society:

4. Financial statements and reports related to financial status and performance with both the current version and reports from the previous year.

13. The company’s good corporate governance policy. 14. Risk management policy including risk management methods in various areas. 15. Charters, duties, responsibilities, qualifications and terms in office for the Board of Directors including topics requiring approval from the Board of Directors

Annual Report 2015

Financial Positions and Operating Results

7. Not performing any acts which may cause damages to reputation of the nation, natural resources and environment

3. List of directors on the Board of Directors and executives.

Management and Corporate Governance

6. Campaigning and building awareness of conservation and efficient use of resources and energy to employees

Business Operation

5. Having social responsibility in different forms such as organizing campaigns against drugs continuously, leading to development and promotion Thai children and youths to stay away from drugs, for the purpose of a strong community and drugs-free society

1. The company’s vision and obligations.

16. Charters, duties, responsibilities, qualifications and terms in office for the Audit Committee.

accordance with the law, company objectives, regulations and shareholder meeting resolutions.

17. Contact information for agencies or persons responsible for investor relations work such as names of persons capable of providing information and telephone numbers.

9.2 Sub-Committees

- The company will arrange for an Investor Relations Division to communicate, provide information and answer enquiries by shareholders, investors, analysts, mass media and related government sector in order for the aforementioned persons to receive accurate, complete and transparent information from the company.

To ensure effective duty performance by the Board of Directors, the Board of Directors organized sub-committees to help study and screen performance as necessary. As of 31 December 2015, the company had two sub-committees, namely, the Audit Committee and the Risk Management Committee. The scope of duties for the Board of Directors, each sub-committee, the Chief Executive Officer and the Secretary of the Company was as follows:

- The company will arrange for regular annual policy reviews.

9.2.1 Board of Directors’ Scope of Authority and Duties

- The company will arrange for reports on responsibilities of the Board of Directors toward financial reports to be displayed with the auditor’s report on annual reports. - The company will prepare Management Discussion and Analysis (MD & A) to accompany financial disclosures in every quarter in order for investors to acknowledge information and better understand changes to the company’s financial status and performance in each quarter. - The company will disclose roles and duties of the Board of Directors and sub-committees, the number of meetings and meeting attendance during the previous year including opinions from performing duties, continual trainings and professional development of the Board of Directors on annual reports. - The company will disclose policies on remuneration for directors and high-ranking executives of the company and subsidiaries to reflect duties and responsibilities for eac director or executive including remuneration forms or characteristics.

9.1.5 Board of Director Responsibilities

The Board of Directors takes responsibility for shareholders regarding the company’s business operations, governance in

Board of Director Structure

Taokaenoi Food & Marketing Public Company Limited

1. The Board of Directors is authorized to manage the company, supervise and manage the company to ensure compliance with the law as well as the company’s objectives and regulations, including resolutions of Board of Director meetings and shareolders’ meetings with responsibility, honesty, caution and preservation of the company’s benefits based on good corporate principles. 2. The Board of Directors has the power to appoint directors and/or the management of the company to perform any or multiple actions in order to operate as assigned by the Board of Directors in addition to having the power to appoint the Chief Executive Officer (CEO) and other sub-committees such as the Management Committee and the Recruitment and Remuneration Committee as deemed fitting and necessity along with approval of scopes of power and duties of various sub-committees including cancellation, revocation or revisions to change the aforementioned powers. 3. Specify or change the names of directors with signatory authority to act on behalf of the company. 4. Set goals, guidelines, policies, work plans and budgets of the company. Control and supervise administration and management by the management or assigned persons for compliance with policies and work plans prescribed by the Board of Directors.

6. Supervises for the management in compliance with approved policies, work plans and budgets.

8. Prepare the company’s annual reports and/or reports by the Company and/or the Board of Directors to comply with associated laws or regulations. 9. Prepare policy related to corporate governance based on the principles of good corporate governance and adapt the aforementioned policies effectively.

17. Govern to ensure disclosure of significant data related to the company with accuracy, completeness, modernity, transparency, easily accessed channels of information with equity and reliability. 18. Arrange meeting attendance with at least half of the number of meetings held each year. 19. The company’s Board of Directors has the power to consider approval in any necessary topics related to the company or any topic deemed fitting and beneficial for the company.

20. The Board of Directors has other powers, duties and responsibilities as prescribed by the law, relevant criteria, company regulations and resolutions of the general shareholders’meeting.

13. Provide fair oversight in the interests of major and minor shareholders based on rights, including equitable treatment of shareholders and markets.

21. The Board of Directors may assign a director, multiple directors or other persons to perform any actions on behalf of the Board of Directors. Furthermore, the Board of Directors may cancel, withdraw, change or revise that authority. The aforementioned authorization does not include granting power or proxy enabling directors or persons authorized by directors to approve transactions in which the person or persons with potential disputes, stakes or benefits in any characteristics in conflict with the company or subsidiaries. Furthermore, approval from the general shareholders’ meeting is required for connected transactions and acquisitons or sale

14. Arrange for appropriate power balance between the management by placing importance on ratios and numbers of independent directors in the company’s Board of Directors. 15. Ensure processes to transmit data for the Board to receive adequate information from the mangament to enable compliance with authority, duties and respondsibility.

Annual Report 2015

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12. Arranging for the company to have a secretary to help the Board of Directors in various operations to ensure business operations of the company are in compliance with the law and relevant regulations.

10. Request professional opinions from external organizations when needed to accompany proper decision-making.

Financial Positions and Operating Results

11. Review risk management processes and policy in addition to monitoring performance.

The following topics may be performed by the Board of Directors only with approval from the general shareholders’ meeting. (a) Any topic prescribed by law to require approval from the general shareholders’ meeting. (b) Any topic in which directors are stakeholders fitting scopes identified by law or notifications of the Stock Exchange of Thailand to require approval from the general shareholders’ meeting.

Management and Corporate Governance

7. Organize reliable accounting systems, financial statements and audits in addition to ensuring effective internal control and internal audit systems.

16. Oversee clear and transparent processes related to transactions between the company and subsidiaries with connected persons to prevent conflicts of interest. Sufficiently accurate openings including reports to the Board of Director’s

Business Operation

5. Consider reviews and approval in significant topics related to the company’s performance such as vision, objectives, policy, business strategy, the company’s goals and plans for operation, financial goals, large investment projects and the company’s budget.

of significant assets belonging to the company according to notifications of the Capital Market Supervisory Board, notifications of the Securities and Exchange Commission and specifications of the Stock Exchange of Thailand and/or associated agencies in the aforementioned topic.

9.2.2 Scope of Authority and Duties for the Audit Committee

1. Review for the company to have accurate financial reports and sufficient disclosure of information for equity among shareholders by coordinating with outside auditors and executives responsible for preparing quarterly and annual financial reports. 2. Review to ensure the company has proper and effective internal control and internal audit systems in addition to considering internal audit agency independence along with approval for considerations to appoint, transfer or terminate employment of the head of internal audit agencies or any other agencies with responsibilities involving internal audits. 3. Review to ensure the company complies with laws on securities and exchange, stock exchange specifications or laws related to the company’s business. 4. Consider selection and nomination of independent persons to function as auditors for the company in addition to proposing remuneration for the aforementioned persons and attending meetings with auditors without attendance by the management at least once a year. 5. Consider connected transactions or transactions with potential conflicts of interest in accordance with laws on securities and exchange in addition to stock exchange specifications to ensure reasonable transactions with ultimate benefits for the company along with considering disclosure of the company’s complete and accurate information in cases with connected transactions or transactions with potential for conflicts of interest. 6. If the company’s auditor encounters suspicious incidents related to directors, executives or any other persons with responsibilities in operations of

Taokaenoi Food & Marketing Public Company Limited

the company and subsidiaries, violations of the law and the auditor has reported the aforementioned incidents to the Audit Committee, the Audit Committee is required to carry out further audits and present preliminary auditing reports to the Office of the Securities and Exchange Commission and the auditor without delay in 30 days from the date reports are received from the auditor. 7. Prepare reports from the Audit Committee by disclosure in the company’s annual report. The aforementioned reports are required to be signed by the Chairman of the Audit Committee and must at least contain the following information: (a) Opinions regarding the accuracy, completeness and reliability of financial reports by the company and subsidiaries. (b) Opinions related to the adequacy of the internal control systems of the company and subsidiaries. (c) Opinions related to compliance with laws on securities and exchange, stock exchange specifications or laws related to the business of the company and subsidiaries. (d) Opinions related to auditor suitability. (e) Opinions concerning transactions with potential for conflicts of interest. (f) The number of Audit Committee meetings and attendance by each Audit Committee director. (g) Overall opinions or observations by the Audit Committee from performing duties according to the charter. (h) Any other transactions which the Audit Committee believes shareholders and investors should be aware of under the scope of duties and responsibilities assigned by the Board of Directors. 8. In performing duties, if the Audit Committee encounters or suspencts the following transactions or actions with potentially significant impact on the company’s financial status and performance, the Audit Committee is to report to the Board of Directors to make corrections within the period of time considered appropriate by the Audit Committee. (a) Transactions with conflicts of interest. (b) Corruption or significant abnormalities or errors in the internal control system.

(c) Violations of laws on securities and exchange, stock exchange specifications or laws related to the company’s business.

10. Perform any other duties assigned by the Board of Directors as deemed fitting. In performing duties within the scope of duties and responsibilities, the Audit Committee has the authority to invite the management, executives or employees of the company or affiliated subsidiaries to make reports, provide opinions, attend meetings or send documents considered to be related and necessary.

9.2.4 Scope of Authority and Duties of the Chief Executive Officer

The Chief Executive Officer is under obligation to manage and control the company according to the company’s preliminary objectives. The Chief Executive Officer is required to perform duties and responsibilities in the company’s operations personally or assign managers from the next level to act on behalf of the Chief Executive Officer. The Chief Executive Officer’s duties and responsibilities include but are not limited to the following duties and responsibilities: 1. Supervise and provide recommendations in the company’s daily operations and management.

3. Recommend guidelines to help the company achieve results in the areas of the company’s vision, obligations, strategies, goals, objectives and annual business results.

9.2.3 Scope of Authority and Duties of the Risk Management Committee

4. Delegate or assign any other persons deemed fitting by the Chief Executive Officer to duties on behalf of the Chief Executive Officer in necessary and proper issues by primarily considering the benefit of the company while remaining under criteria of the law and the company’s rules and regulations.

1. Set organization-level risk management policies, strategies and guidelines. 2. Set risk management plans of the management, including the organization’s overall risk management processes. 3. Govern to ensure that management complies with organization-level risk management policies, strategies and guidelines in addition to monitoring performance according to organization-level risk management frameworks and making regular reports to the Board of Directors.

5. Order and provide recommendations regarding operations according to projects and objectives set forth in the company’s scope and directions to create maximum benefits for the company. 6. Monitor and assess the company’s daily performance to manage potential risks from external and internal factors. Annual Report 2015

Other Related Information

The Audit Committee has the term in office of three years per term excepting cases where directors resigned according to terms and regulations of the company, whereby directors can be reappointed to the position.

Financial Positions and Operating Results

The Board of Directors is authorized to make revisions or changes to the scope of authority and duties of the Audit Committee as deemed necessary or appropriate.

2. Carry out any business in accordance with objectives, policies, regulations, agreements and orders including resolutions of the Board of Directors’ meetings and/or resolutions of the company’s general shareholders’ meeting.

Management and Corporate Governance

9. The Audit Committee may seek independent opinions from any other professional consultants when considered necessary at the expense of the company.

5. Perform any other duties assigned by the Board of Directors

Business Operation

If the Board of Directors or executives fail to make corrections within the specified time, any audit director may report the aforementioned transactions or actions to the Office of the Securities and Exchange Commission or the Stock Exchange of Thailand.

4. Review systems or assess efficiency of risk management policies, strategies and guidelines at least on an annual basis and whenever risk levels are found to have changed.

7. Oversee communications with the public, shareholders, customers and employees to support the company’s good reputation and image. 8. Consider approval for operations in various transactions such as product purchases-sales, raw material procurement, marketing, human resource management, procurement and general management to carry out the company’s normal transactions. The aforementioned considerations of approval must be under conditions and limitations according to the company’s notifications on approval authority regulations. 9. Appoint purchase and sales representatives in the company’s normal trade transactions. 10. Accept applications and hire employees, manage transfers in the same field, between divisions, between departments or terminate employments and set wage rages, salaries, remuneration, bonuses and welfare for employees. 11. Consider appointing outside consultants for the company’s operations as considered appropriate. 12. The Chief Executive Officer has the authority to issue, revise, add and modify orders, regulations, notifications and memorandums of understanding to ensure the company’s operations are in accordance with policies for the benefit of the company including to maintain discipline within the organization. 13. Perform any other duties as periodically assigned by the Board of Directors. 14. Operate businesses related to the company’s general management and; 15. Exercise authority to sign any documents related to necessary operations for or related to normal trade transactions of the company as specied in 1 – 14. However, any legal actions that (a) may cause conflicts of interest with the company or subsidiaries; (b) may cause conflcits of interest with the Chief Executive Officer or persons with potential disputes and stakeholders in the company or subsidiaries as specified by law and Securities and Exchange

Taokaenoi Food & Marketing Public Company Limited

Commission Notifications or Capital Market Supervisory Board Notifications or Stock Exchange of Thailand Notifications are not considered to be within the scope of authority for the Chief of Executive Officer to consider the aforementioned legal actions by personal judgment or assignment for others to act on behalf of the Chief Executive Officer. In the aforementioned cases, the aforementioned legal actions must be presented for approval via the Audit Committee to the Board of Directors and/or the general shareholders’ meeting (depending on the case) as specified in the company’s regulations and the law, excepting approval for transactions in accordance with normal business with clearly defined scopes.

9.2.5 The scope of approval by the Chief Executive Officer in significant transactions is as follows:

1. Approval of doubtful debts for domestic and foreign customers not exceeding 10,000,000 baht per year. 2. Investment in fixed assets (such as land, buildings, structures or machinery, etc.) not exceeding 80,000,000 baht.

The company prepares annual master plans covering the annual budget and investment plans. Annual budgets will specify sales and expenses according to sales ratios. The aforementioned plans require approval from the Board of Directors with the Chief Executive Officer considering approval for various expenses related to business operations such as product and service sale price structure specification including scopes of discounts for customers, sales promotion plan approval, commission fee payment approvals and raw material purchase order approval, etc., in accordance with policies and regulations approved by the Board of Directors based on the framework of the aforementioned annual master plan with monthly performance reports for the Board of Directors. In addition, at the middle of every year, the company will review the master plan for the second half of the year. Adjustment to plans from the approved master plan requires approval for the aforementioned revised plans from the Board of Directors. Furthermore, in practice, approval to enter into significant transactions requires the Chief Executive Officer to present the aforementioned topic to the Board of Directors’ meeting for consideration of approval prior to entering into transactions even though transaction values are within the scope of approval authority for the Chief Executive Officer in order for

the aforementioned action to be transparent, accountable and in accordance with principles of good governance.

9.3.1 Independent Directors

3. Independent directors must not be persons related by blood or legal registration as a father, mother, spouse, sibling and child including spouse of a child of other directors, executives, major shareholders, persons with control authority or persons who will be nominated to become a director, executive or person

5. Independent directors must not be or have been an auditor of the company, the mother company, subsidiaries, joint ventures, major shareholders or persons with control authority or a partner in an auditing office which have auditors of the company, the mother company, subsidiaries, joint ventures, major shareholders or persons with control authority of the company unless independent directors were free from the aforementioned characteristics for no less than two years before the date of submitting requests to the office.

Annual Report 2015

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2. Persons who are not or had never been directors involved in management, hired workers, employees, consultants with regular salaries or persons with control authority in the company, the mother company, subsidiaries, joint ventures, subsidiaries in the same level, major shareholders or persons with control authority in the company unless independent directors did not have the aforementioned characteristics for no less than two years before submitting requests for permission to the office. The aforementioned forbidden characteristics does not include cases where independent directors were civil servants or consultants for the government sector as a major shareholder or person with control authority in the company.

Business relationships in Paragraph One include normal trade transactions to operate businesses, rent or lease real-estate, transactions involving assets or services, provision or receipt of financial assistance by receiving, providing loans, guarantees, providing assess as collateral for liabilities including other behaviors with similar characteristics resulting in the company or parties of contracts having more debts to pay to the other party at three percent of net existing assets of the company or twenty million baht and up, depending on which amount is lower. The aforementioned debt calculation must be concurrent with the value calculation of connected transactions as prescribed by the Capital Market Supervisory Board Notification on Criteria for Entering into Connected Transactions. However, the aforementioned debt consideration is to include debt incurred in one year before business relationships with the same person.

Financial Positions and Operating Results

Independent Director Qualifications 1. Hold shares not exceeding one percent of all shares with rights to vote in the company, the mother company, subsidiaries, joint ventures, major shareholders or person with control authority in the company. This includes shares held by persons related to that independent director.

Management and Corporate Governance

The company selects independent directors by considering qualifications according to the Public Company Limited Act of B.E. 2535 (1992 A.D.), laws on securities and exchange, Securities and Exchange Commission Notifications, Capital Market Supervisory Board Notifications including associated notifications, rules and/or regulations. The company arranges to have independent directors numbering at least one-third of all directors in the company without having less than three independent directors.

4. Independent directors must not have or had business relationships with the company, the mother company, subsidiaries, joint ventures, major shareholders or persons with control authority in the company with characteristics potentially preventing independent judgment in addition to not being or had been a significant shareholder or person with control and authority over persons with business relationships with the company, the mother company, subsidiaries, joint ventures, major shareholders or persons with control authority in the company unless independent directors were free from the aforementioned characteristics for no less than two years before the date of submitting requests to the office.

Business Operation

9.3 Recruitment and Appointment of Directors and High-Ranking Executives

with control authority in the company or subsidiaries.

6. Independent directors must not be or have been a provider of any professional services including service provision as a legal or financial consultant with service fees exceeding two million baht per year from the company, the mother company, subsidiaries, joint ventures, major shareholders or persons with control authority of the company in addition to not being a significant shareholder, person with control authority or partner of providers of that professional service unless independent directors were free from the aforementioned characteristics for no less than two years before the date of submitting requests to the office. 7. Independent directors must not be directors appointed to represent the companyâ&#x20AC;&#x2122;s directors, major shareholders or shareholders related to major shareholders. 8. Independent directors must not operate in businesses with the same conditions as the company or have significant competition with the business of the company or subsidiaries in addition to not being a significant partner in partnerships or a director with involvement in management, a hired worker, an employee, a consultant with regular salaries or hold shares exceeding one percent of total shares with the right to vote in other companies operating in the same business with significant competitions with the business of the company or subsidiaries. 9. No other characteristics preventing independent opinions related to the companyâ&#x20AC;&#x2122;s performance. Independent directors may be assigned by the Board of Directors to make decisions in the companyâ&#x20AC;&#x2122;s business operations, the mother company, subsidiaries, joint ventures, subsidiaries at the same level, major shareholders or persons with control authority in the company in the form of a collective decision. In cases where persons requested for appointment as an independent director are persons who have or had business relationships or professional service provision exceeding values specified in Paragraphs of 4 or 6, the company is to provide opinions from the Board of Directors to demonstrate

Taokaenoi Food & Marketing Public Company Limited

consideration according to principles in Article 89/7 that appointment of the aforementioned persons have no impact on duties and independent opinions in addition to arranging disclosure of the following information in shareholder meeting invitations on the agenda of consideration to appoint independent directors. (a) Characteristics of business relationships or professional service provision causing the aforementioned persons to have qualifications not in accordance with prescribed criteria. (b) Reasons and need for maintaining or appointing the aforementioned persons as independent directors. (c) Opinions of the Board of Directors toward persons who proposed for the aforementioned persons to be appointed as independent directors.

9.3.2 Audit Directors

The company has criteria for selecting and appointing audit directors based on the following qualifications: 1. Audit directors hold shares not exceeding five percent of paid-up capital in the company, companies in the corporation, joint ventures or affiliated companies. This includes shares held by affiliated persons. 2. A director without participation in management of the company, companies in the corporation, joint ventures, affiliated companies or major shareholders of the company. 3. Audit directors must not be hired workers, employees or consultants with regular salaries from the company, companies in the corporation, joint ventures, affiliated companies or major shareholders of the company. 4. Audit directors must have no direct or indirect financial and management benefits or interests in the company, companies in the corporation, joint ventures or major shareholders of the company for a period of one year before being appointed as audit directors, unless the Board of Directors has thoroughly considered and rendered the opinion that previous interests or stakes will have no impact on performance of duties and independent opinions. 5. Audit directors must not be affiliated with or close relatives of executives or major shareholders in the company.

7. Ability to perform duties, express opinions or report performance according to duties assigned by the Board of Directors without being controlled by executives or major shareholders in the company, including affiliated persons or close relatives of the aforementioned persons.

9.3.3 Recruitment and Remuneration Consideration for Directors and the Highest-Ranking Executives

The company has no Recruitment and Remuneration Consideration Committee. However, the company prescribed the following qualifications and steps for recruitment and remuneration consideration for directors and the highestranking executives:

1. Directors and the highest-ranking executives are required to have normal status and have legal majority. 2. Directors and the highest-ranking executives must not be bankrupt, disabled or virtually disabled.

4. Directors and the highest-ranking executives must not be fired or discharged from government service, government organizations or agencies for corruption to duties. 5. Directors and the highest-ranking executives must not be in the process of being accused by the SEC or being

7. Directors and the highest-ranking executives must have never received a final verdict for imprisonment regardless of whether or not the Court reached a verdict pending sentencing. Furthermore, directors and the highest-ranking executives must be free from prison sentences or free from the waiting period for

Annual Report 2015

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3. Directors and the highest-ranking executives are required to be persons who were never imprisoned by final verdict for crimes involving corrupt properties.

Financial Positions and Operating Results

Qualifications of Directors and the Highest-Ranking Executives The company has criteria for selection and appointment of directors and the highest-ranking executives according to the following qualifications:

6. Directors and the highest-ranking executives must not be in the process of being accused by agencies governing financial institutes, whether domestic or overseas, or the process of being prosecuted from cases where the aforementioned agencies made accusations or be in the period when the aforementioned agencies forbade directors and the highest-ranking executives from becoming directors or executives of financial institutes. Directors and the highest-ranking executives must have never received a final verdict for imprisonment whether the Court reached a verdict pending sentencing. Furthermore, directors and the highest-ranking executives must be free from prison sentences or free from the waiting period for more than three years only in cases with causes from deceptive, fraudulent or corrupt management related to properties causing damage to the financial institute where that person is either a director or executive whether the damage was to the institute or its customers.

Management and Corporate Governance

8. Complete qualifications for becoming a director of the company.

prosecuted due to accusation by the SEC or received a final verdict for imprisonment regardless of whether the Court reached a verdict to await punishment. Directors and the highest-ranking executives are required to be free from prison sentences or free from waiting for punishment for no less than three years only for the following crimes according to laws on securities and exchange or laws on futures contracts: (1) Unfair actions related to purchase-sales of securities or futures contracts. (2) Corruption or damage to properties, creditors or the public. (3) Failure to perform duties with caution or honesty. (4) Intentional display of false significant contents or concealment of significant facts which should be notified. (4) Operation in securities businesses or futures contract businesses without permission and fitting the scope of public fraudulence.

Business Operation

6. Audit directors must not be appointed as representatives to maintain the interests of directors in the company, major shareholders or shareholders related to major shareholders of the company.

more than three years for public offences related to deceptive, fraudulent or corrupt management related to properties. 8. Directors and the highest-ranking executives must not be persons ordered by the Court for properties to be confiscated and belong to the state according to anti-corruption and suppression laws, anti-money laudering laws or other laws with similar characteristics who have not passed the period of three years from the date when the Court ordered for properties to belong to the state. 9. Directors and the highest-ranking executives must not engage in conduct involving the performance of dishonest actions, avoid dishonest actions or severe negligence in transactions of the company or subsidiaries and cause damage to the company or shareholders or enable directors and the highestranking executives or other persons to receive unlawful gains. 10. Directors and the highest-ranking executives must not engage in conduct involving the disclosure or dissemination of false information or contents related to the company or subsidiaries which may cause misunderstandings or conceal significant facts which should be notified with potential impacts on decision-making by shareholders, investors or associated persons whether by ordering, responsibility or participation in preparations, disclosure or dissemination of that information or contents or by performing actions or avoiding any actions unless the person can prove his/her position, status or duties prevent awareness of the aforementioned false information or contents or lack of facts which should be notified. The following transactions of the company or subsidiaries whether if it was ordering, approving, supporting, benefiting or participating significantly in any characteristics fit the scope of dishonest behavior unless proven otherwise: (1) Transactions not conducted with the same characteristics as actions performed by normal business entrepreneurs with parties of contracts in the same situation and transactions not performed for the benefit of the company or subsidiaries or

Taokaenoi Food & Marketing Public Company Limited

transactions with characteristics of personal gain or benefiting others. (1) Transactions not compliant with the criteria prescribed by laws on securities and exchange, connected transactions or significant transactions fitting the scope of acquisition or sale or properties. 11. Directors and the highest-ranking executives must not engage in conduct involving unfair actions or taking advantage of investors in the purchase-sales of securities or futures contracts or performed, participated or supported the aforementioned actions. Director Recruitment Procedures The company has procedures for selection by having the Board of Directors consider proper qualifications in the areas of knowledge, ability and work experience to nominate directors for further consideration of approval by the general shareholders’ meeting. In appointing directors, the company will comply with the company’s regulatins, which can be summarized as follows: 1. The Board of Directors is composed of at least five directors. No less than half of all directors must have residence in the Kingdom. Furthermore, the company’s directors must be persons with qualifications and none of the forbidden characteristics prescribed by law. 2. Director election by the general shareholders’ meeting requires a majority vote based on the following criteria and methods: (a) A shareholder has votes equal to one share per vote. (b) Shareholders are to vote on directors individually. (c) The persons with the next highest vote count in descending order will be elected as directors equal to the number of directors required. In cases where a person elected in the next order has tied votes exceeding the required number of directors, the Chairman is to cast the deciding vote. 3. At the annual general meeting, one-third of all directors are to leave positions. If the number of directors cannot be equally divided into three parts, directors are to leave positions at the number closest to one-third of all directors.

2. In cases involving proposals to adjust remuneration for the highest-ranking executives (the Chief Executive Officer), the Board of Directors is to consider approval for the aforementioned transaction.

To create information perception equality and prevent use of insider information for the benefit of directors, executives, employees and hired workers including spouses and children who have not reached legal age of directors, executives, employees and hired workers in addition to having good governance, the Board of Directors considered and approved the policy governing use of the company’s insider information as follows: 1. The company’s directors, executives, employees and hired workers are required to maintain secrets and/ or inside information belonging to the company. 2. The company’s directors, executives, employees and hired workers must not disclose secrets and/or inside information belonging to the company or seek direct or indirect personal gains or benefits for others regardless of whether there are returns or not. 3. The company’s directors, executives, employees and hired workers must not purchase, sell, transfer

Annual Report 2015

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3. Remuneration considerations for the company’s directors and sub-committee directors are to be presented to the general shareholders’ meeting for consideration of approval on an annual basis.

9.5 Insider Information Supervision

Financial Positions and Operating Results

1. The Board of Director considers remuneration for the company’s directors, sub-committee directors and the highest-ranking executives (Chief Executive Officer) appropriately in line with the duties, responsibility, performance, type/size of the company’s business and expected benefits of each employee. The aforementioned remuneration must be appropriate and comensurate for motivating and maintaining quality personnel when compared to companies in similar businesses. Furthermore, the Board of Directors also considers appropriate types, payment methods and amounts of remuneration.

In the control and supervision of subsidiaries and joint ventures, the company will send directors or high-ranking employees to govern subsidiaries and joint ventures in order to specify key policies and control business operations in the right direction and create maximum benefit for the overall corporation. In addition, the company should have veto rights on significant topics to be carried out by that subsidiary. Investment in the aforementioned companies requires consideration of approval by the Board of Directors and, in cases of entry into connected transactions, consideration of approval by the Audit Committee is also required. Furthermore, subsidiaries are required to have regulations in carrying out connected transactions, acquisition or distribution of assets or any other significant transactions of the aforementioned company with criteria for information disclosure. If operations will have significant impacts on the company, approval from the the company’s Board of Directors is required in addition to supervision of data preparation and account recording by subsidiaries for the company to be able to audit and consolidate to prepare financial statements in time.

Management and Corporate Governance

Consideration of Remuneration for Directors and the Highest-Ranking Executives Remuneration for the company’s directors, subcommittee directors and the highest-ranking executives are to be considered according to the following guidelines:

9.4 Governance of Performance by Subsidiaries and Joint Ventures Business Operation

Highest-Ranking Executive Recruitment Procedures The company has procedures for selecting and appointing the highest-ranking executives as follows: I n recruiting the highest ranking executives (in the position of the Chief Executive Officer), the company’s directors will screen and recruit persons with complete and proper qualifications, knowledge, ability, skills and experience for the benefit of the company’s performance in addition to good understanding in the company’s business and ability to manage successfully to achieve objectives and goals established by the company. The Board of Directors will approve the aforementioned appointment of the highestranking executives.

or accept transfers of securities belonging to the company by using secrets and/or inside information belonging to the company and/or enter into any legal actions using secrets and/or inside information belonging to the company with direct or indirect potential damage to the company. Persons in violation of the aforementioned regulations are considered to have committed severe crimes. 4. The company has set guidelines to preserve and prevent insider trading by forbidding directors, executives, employees at the department director level and up and persons involved with inside information from purchasing the company’s securities for one month before disclosure of quarterly financial statements and annual financial statements and for 48 hours after significant information has been disclosed. 5. Directors, executives and employees at the department director level and up are required to

report purchases or sales of the company’s securities including every change in the aforementioned holdings to the company in addition to reporting holdings of securities to the Securities and Exchange Commission according to Article 59 of the Securities Act. The company has specified disciplinary actions for persons seeking to benefit from insider trading or disclosure causing potential damage to the company by considering appropriate punishments for each case such as verbal warnings, written warnings, probation periods and termination of employment by firing, discharging or having employees resign, depending on the case, etc. Furthermore, the company provides education for executives to be aware of duties in reporting securities held by executives, spouses and children who have not reached legal age and are holding securities in the company including punishments according to the Securities and Exchange Act of B.E. 2535 and revisions (the Securities Act).

9.6 Auditor’s Fee The company and subsidiaries paid auditor’s fee at 2.6 million baht to EY Office Co., Ltd. which is the auditing office where the auditor for 2015 is placed during the past accounting cycle. The auditing office and the auditor had no relationships or stakes in the company/executives/major shareholders or persons associated with the aforementioned individuals. Unit: Million Baht Auditor’s Fee

TKN

TKNRF

NCP

WMI

Total

Auditor’s Remuneration

1.59

0.46

0.35

0.10

2.50

Other Service Fees*

0.06

0.02

0.01

0.00

0.09

Grand Total

1.65

0.48

0.36

0.10

2.59

Remarks: * “Other Service Fees” means travel and document preparation expenses.

9.7 Compliance with Good Corporate Governance Principles in Other Issues Succession Plan Preparations

The company has prepared succession plans to build consistency in management for service users at the level of department chiefs or heads and will emphasize executive-level employees to help the Human Resources Department be able to prepare personnel to be ready to work systematically with proper competency and necessary experience for important positions in the company.

Taokaenoi Food & Marketing Public Company Limited

10.1 General Policy

This policy had principles specified to be joint practice guidelines as follows:

3. Labor Practices – The company maintains wages at suitable levels for Thailand’s industry. Modifications, structural changes and organization regulation will be carried out with responsibility under the framework of Thai law including strict compliance with the law and regulations related to occupational health and safety to build a safe work environment for

6. Customer and Procurer Relations – The company focuses on good service for maximum customer satisfaction and the company is sincere in customer complaint management including efforts to correct mistakes from production or service. At the same time, the company expects to receive goods and service with the same characteristics from procurement organizations and the company emphasizes on maintaining sustainable relationships with customers and procurers. 7. Community Participation and Development – The company will consider community needs, promote personnel to become partners with persons involved in local areas around operating facilities in the area of education, cultural and social development while participating to improve quality of life in communities along with promoting and supporting employee participation in volunteer work and public benefit activities with communities.

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2. Human Rights – The company gives importance to basic human rights to promote respect for rights and freedom without discrimination, equality without gender and class division. The company does not employ child labor and is against corruption in every form.

5. Fair Operations – The company is determined to operate its business with fairness, ethics, attention to compliance with the law, respect for social rules and being a politically neutral organization.

Financial Positions and Operating Results

1. Corporate Governance – The company is determined to become a good model by building reliability for investors and stakeholders in business operations, increasing value and promoting the organizations sustainable growth including management according to international good governance principles to benefit Thai society and achieve goals while maintaining moral excellence as a fundamental value of a leading organization.

4. Environment – The company has a clear environmental policy and has strict adherence by having measures to reduce environmental impacts from various activities of the organization to preserve and maintain econological and environmental systems at communities where the company operates business in addition to building corporate culture by building conscientiousness among employees and persons working in the company to enter green culture and green networks with sustainability.

Management and Corporate Governance

The company has policy to operate its business with corporate social responsibility. The company is aware and gives importance to supporting activities for society and the surrounding community, including continual care for the environment with the intention to work with the persons involved by aiming to build and continue good relationships from mutual acceptance and trust with consideration of potential impacts on stakeholders such as shareholders, employees and communities where the company operates business, customers, trading partners and government agencies including society and the country in addition to building attitude and corporate culture with the aim for employees to have responsibility for our shared society.

employees, contractors and visitors by attempting to keep everyone safe from accidents and any potential hazards.

Business Operation

Social 10 Corporate Responsibilty

10.2 Operations and Report Preparation Report Preparation Processes

To regulate compliance with the Corporate Social Responsibility Policy (CSR) and the Anti-Corruption Policy by the company and subsidiaries, the company has assigned the Human Resources Department the responsibility of organizing CSR activities by presenting work plans to the Executive Committee meeting for approval on an annual basis in addition to reports summarizing CSR activity performance during the past year for the Board of Directors to acknowledge. In 2014, the company held Taokaenoi employee rallies to plant mangrove forests in Phetchaburi to build conscientiousness in maintaining the ecosystem and the environment among employees. Furthermore, the company organized activities to donate food, dry goods and donate to temples in the vicinity of the company during important Buddhist festivals along with granting scholarships to schools in factory neighborhoods in Pathumthani. The company reports these activities to employees via mail in the company and newsboards along with reporting to executives at monthly meetings of the Executive Committee. In regulating the Anti-Corruption Policy, the company specified for employees with any form of complaint related to corruption to present facts to internal audit agencies to prepare reports for consideration and presentation to the Audit Committee for further action.

Operations under Policies Disclosed by the Company

Operations according to the Corporate Social Responsibility Policy had many processes specified in operation regulations according to ISO standard systems, departmental and individual key performance indicators (KPI) and in various processes with specification of guidelines and communications with employees in addition to visits to inspect operating processes of certified ISO institutes to ensure the company operates according to disclosed policies. Examples of operations consisted of the following: The Personnel Department assigned to carry out this activity coordinated with every agency involved such as by setting practices or notifications in factories in Thai, English and Burmese along with providing opportunities for every employee of every nationality to participate such as meritmaking on important religious days and New Year parties, etc..

Taokaenoi Food & Marketing Public Company Limited

The objectives were to promote equality among employees in every class, modify the scenery around factories and the surrounding communities by planting trees along public rails in front of factories, provide training for employees at every level to review and promote work knowledge. The Procurement Department specified regulations requiring more than one supplier for a single raw material or packaging material, printing channels for complaints on every package and communicating directly with the Chief Executive Officer via electronic channels, etc.

10.3 Business Operations Impacting Corporate Social Responsibility Business operations of the company and subsidiaries are not investigated, being investigated or accused of having negative impacts on society and the environment with significant potential impacts on business operations, reputations or reliability of the company or subsidiaries.

10.4 Social and Environmental Benefit Activities Taokaenoi aims to build economic and social growth in every community where the company operates business, reduce environmental impacts and use resources cost-effectively by building environment preservation conscientiousness at every level, developing every work process and selecting environmentally-friendly technology. Furthermore, the company also carries out activities to build networks for sustainable development and education in order to be able to truly answer needs of associated persons. Global warming is considered an important problem with impacts on society and every living creature on Earth. Humans, animals or even the environment are threatened by these changes with growin severity, climate and seasonal fluctuations, loss of ecological balance and extinction risks. As a result of these concerns, Taokaenoi has shown interest in the aforementioned issues. Therefore, planting seaweed to reduce carbon dioxide is one of the options that should be monitored the most at this time because, apart from reducing carbondioxide, this method can also be used to produce algae biofuel and high-value chemicals.

10.5 Corruption Involvement Prevention Policy

2. Anti-corruption measures are considered part of business operations and a duty and responsibility of the Board of Directors, executives, supervisors and employees at every level to render opinions related to practices to ensure that anti-corruption operations succeed in line with appropriate policies in addition to reviewing practice guidelines and specifications for operations to be concurrent with changes in business, rules, regulations and specifications of the law.

4. The company does not perform or support bribery in any form. Every activity under the care of the company, including the control of donations to charity, donations to political parties, business gifts

8. The company offers justice and protection for employees or outside persons who reported corruption related to the company. 9. Directors, executives and employees who carried out corrupt actions committed ethical crimes requiring consideration for the highest disciplinary action according to the companyâ&#x20AC;&#x2122;s regulations and may be punished by law if the aforementioned actions are illegal. 10. The company has the Audit Committee or consents for outside agencies to review the management report system and the risk management system to ensure systems are in compliance with international standards as deemed fitting and effective for the business.

Performance

The company and subsidiaries have company operations in compliance with policies for preventing involvement with corruption as follows:

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3. The company developed anti-corruption measures to be consistent with associated laws including moral practices by arranging risk assessments in associated activities or corruption risk groups along with preparing practice guideline handbooks for associated persons.

7. Employees are not to neglect or ignore corrupt actions involving the company. Employees must notify supervisors or the persons responsible and cooperate in various fact examinations. If there are any doubts or questions, employees are to consult with supervisors or persons assigned to perform duties and responsibilities related to monitoring ethical practices. Inaction or refusal to cooperate in investigations is considered a crime.

Financial Positions and Operating Results

The company has set the following practice guidelines in line with the Anti-Corruption Policy: 1. The Board of Directors, executives and employees at every level are required to comply with the Anti-Corruption Policy by being neither directly nor indirectly involved in matters of corruption.

6. The company provides anti-corruption education for the Board of Directors, executives and employees to promote honesty and responsibility in duties and responsibilities along with relating to show the companyâ&#x20AC;&#x2122;s determination.

Management and Corporate Governance

The company is determined to operate its business morally and adhere to corporate social responsibility and responsibility to every stakeholder group based on good corporate governance principles. Therefore, to ensure the company has polices specifying responsibilities, practice guidelines and specifications for appropriate operations to prevent corruption in every activity of the company in addition to having fair, transparent and accountable business operations, the company has prepared this written AntiCorruption Policy as a practice guideline for transparent and sustainable operations by the organization as part of business operations.

5. The company arranges proper internal control and regularly examines internal control to prevent improper practices among employees.

Business Operation

The Anti-Corruption Policy was approved in the 3/2015 Resolution of the Board of Directors on 12 March 2015 as follows:

and support for various activities are transparent without intentions to persuade government or private officials to perform inappropriate actions.

1. Business Risk Assessment to Identify Operations by the Company or Subsidiaries with Risk for Involvement with Corruption The Risk Management Committee arranged for business risk assessments by combining corruption risks with financial risks and has controlling measures by using Key Risk Indicators (KRI). 2. Practice Guideline Specifications to Control, Prevent and Monitor Corruption Risks The company has a clearly specified and practical policy for reporting on suspected crimes to control, prevent and monitor corruption risks. 3. Employee Communication and Training to Provide Education on Anti-Corruption Policies and Practice Guidelines The company has policy to combine with employee orientation handbooks to communicate anti-corruption policies and practice guidelines to employees along with notifying policies to employees via email and public relations boards.

Taokaenoi Food & Marketing Public Company Limited

4. Guidelines for Monitoring Assessment of Practices under the Anti-Corruption Policy The company has internal auditors plan internal audits in the aforementioned topic before making presentations to the Audit Committee and the Board of Directors to monitor the aforementioned assessments of practices according to the AntiCorruption Policy. 5. Have the Audit Committee or An Auditor Approved by the Office to Review Completeness and Sufficiency of All Processes Completeness and sufficiency of all processes are concurrent with auditor processes requiring Management Letter (ML) issuance to executives after audits or reviews and issuance of quarterly and annual financial statements for further presentation to the Audit Committee and the Board of Directors.

Business Operation

Internal Control and 11 Audit Risk Management 11.1 Internal Control

The Board Director meeting no. 3/2016 was held on March 12th, 2016 to assess the sufficiency of the internal control system regarding to the Committee of Securities and Exchange Commission (SEC) comprising internal control system in 5 parts for example organization and environment, risk management, operational control, information, communication system and t racking system. The Board Directoris opinion that internal control in the organization is sufficient and proficient.

P&L Internal Audit Co., LTD (P&L) has been being an auditor of company since 2010 and follow the report of internal audit of company between date September 9, 2014 to October 3, 2014 by reporting to the Board of Auditor no. 4/2014 on November 13, 2014 and further explaining to amendment to the Board of Auditor no. 4/2015 date July 6, 2015. The Board of Auditor is an opinion that internal audit in the organization is sufficient and proficient and can be

The consideration and approval, appoint, demote an internal audit of company shall be get an approval from the Board of Auditor.

11.3 The Risk Management The risk comes from dependence of main manufacturers and main material distributors. The main material in production of processed seaweed which company ordered seaweeds from foreign country, Korea, which Korea is the leading manufacturer and exporter of seaweed. In past three year, company ordered seaweed from them for 90 % of total order per year. Thus, the proportion of seaweed ordering in 2014 and 2015, the company ordered the main manufacturers and main material distributors for 59.5% and 67.57 % of total order respectively. So, the processed seaweed business is risk because it relies on the main manufacturers and main material distributors is insufficient to supply the seaweed to company in qualified quantity, price and qualification. So, it would be significantly effect to company. However, the company imposed the direction of selection of manufacturers and material distributor from experienced and well-known manufacturers and material distributors in market and good finance background and distribution order of seaweed from each manufacturers and supplier for risk

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11.2 Internal Audit

Currently, P&L assigned Mr. Thanapat Wongwit, Internal Audit Supervisor, to be main auditor in company. The Board of Auditor had concerned the qualifation of P&L and Mr. Thanapat Wongwit that is qualified to operate this duty since he is independent and has experience in audit in similar filed of company for 6 years and he had passed the internal audit course, Certificate of The Institute of Internal Auditors of Thailand (CPIAT) no. 21.

Financial Positions and Operating Results

In addition, the company assigned the Board Director of Risk management which had been appointed by the Board Director comprising Miss Orrapat Peeradechapan, Mr. Jirapong Suntipiromkul, Mr. Boonchai Kowpanich, and Miss Porntera Rongkasiriphan to control and manage the risk in the organization to be systematic and effective. The Board Director of Risk management imposed the policy of risk management, risk assessment, and analysis the risk factor which would effect to internal and external organization to operate in all sectors of organization.

achievement and confidential in potential information without an error.

Management and Corporate Governance

The Board highly concern to internal control. Thus, the Board managed finance sector, management sector and operation sector to be effectiveness and comply with the related laws, regulations, rules and the Board emphasized on continually development to be the guideline for COSO (The Committee of Sponsoring Organization of Treadway Commission) to getting successful and efficiency in internal control and risk management in company.

reduction from dependence of manufacturers and material distributors. Furthermore, company can maintain good relationship between other manufacturers and supplier by meeting and exchanging some information because avoiding lack of material from main manufacturers and main material distributors.

11.3.1 The Risk of dependence of main customers

In the past few year ago, the company sold huge amount of the snack to a big retail. The company got income amount 604.59 million baht and 570.78 million baht or 39.39% and 34.19 % of income in 2014 and 2015. Thus, if the company were lost such contracting party, it would get significant effect to company. Nevertheless, the company concerned such the risk by developing the new products. The researchers and developers is hard working to study the behavior of consumers and create the new products to catch the target groups. Additional, the company planned to extends the business under the model of From Sea to Farm by producing the processed agricultural crops. The Risk of renew of rental contracts at Noppawong office Noppawong office is the location of the companyâ&#x20AC;&#x2122;s factory, location of building no1, 3 and 4, which has many landlords. If the company could not renew the contract to all landlords, it would be effect to the business. The renewal contract can be extended until the year 2020 and get commitment for rental for 9 to 12 years count from year 2020. However, there is 1 area, location building no.2, has the rental age is 8 years. The others use for being parking lot and canteen. The renovation area should be belonging to the landlord. However, the company concerned the rick of such rental contracts and the new factory area, Rojana Industry, is under the construction and it is going to operation within 2016 and can support the production in the future. If it is necessary to move to , Rojana Industry, the company is promptly move all machines. Additional, the company has the land at Ladbaulaung to support of such of moving. It can easily move within 6 months by using budget not more than 300 million baht. So, the company believes that the company can manage such a risk.

Taokaenoi Food & Marketing Public Company Limited

The Risk of the fluctuation of material pricing The cost of production and distribution of processed seaweed comes from the seaweed. The seaweed cost is highly cost in 2014 and 2015 is 37.30% and 35.93 % of total cost. If price of seaweed is fluctuation, it will effect to the company. However, the company planned to manage such a risk by doing contract with the manufacturer and supplier for 1 year by indication the qualification of seaweed such as quantity, price and quality. If the seaweed in the market is higher, the company will compare an analysis such information with the competitors. The Risk of competitive in industry There are many supplier of snack industry and the processed seaweed has low investment cost, so there are many competitor. However, the compay cannot comparative to the others bcause the company is the first trader and the customers recognized and remembered in our products. Additional, company has promote and public via TV, cable and internet by using annual budget and sponsor trading by being sponsorship in the concert and the shows. The Risk of immediately stop working caused by Force Majure Doing the business can be immediately stop due to production problem or losses in asset or national disaster, politic, terrorist. The company planned to protect and reduce such the risk by appointed Quality Management Representative to give advice and audit the management, building, fire exit for reduction of such the risk. However, the such direction cannot guarantee the effect from natural disaster or force majure. For safety, the company decided to have insurance with the stably and experienced insurance statues to manage the risk including stolen seaweed, natural disaster, force majure, liability from other person or management and the company will get the compensation of such the situation happened.

11.3.2 The Risk of production

The Risk of fluctuation in foreign exchange The company faces to the risk of fluctuation in foreign exchange because of ordering seaweed from in foreign countries and distribution products in nation and foreign countries. So, the ordering and exporting must impose in the US dollar. In 2014 and 2015, the company has cost of order seaweed in US dollar for 22.39 % and 22.61 % of total order and the selling in US dollar is 33.56% and 25.11%. However, the company partial imposed the export rate in US dollar as same as order of material. If Baht is appreciated, it will effect to the circulation but if Baht is weaken, it will effect to cost of material. The company resolution by buying the Future with finance institute for 1 year to reduce of fluctuation in foreign exchange.

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However, the company planned to manage inventories stock with strictly for protection and reduction such the risk. The processes of products and materials have to be assess for the market and production to manage the orders and manage the stock. It can be helped the company to have the volume of goods to proper with the consumers and easily to release the goods to the market. For the container and packaging , the company has the good measure of storage. So, the company can manage the risk of deterioration of inventory stock by calculating the deterioration which will be effect to profit of company.

11.3.3 The Risk of currency

Financial Positions and Operating Results

The Risk of deterioration of inventory stock The inventory stock comprises of the finished products, material, container and packaging and such of the inventories are necessary to maintain and use in the appropriated time before deterioration. Thus, the majority of inventories are seaweed and the shelf life averages 1 year to 2 years count from the production date. The company will lose the income and consume time and pay the extra expense to destroy the expired products. So, the company resolves by doing sale contract of seaweed foe 1 year, savory powder for 6 months and packaging for 1 year and maintain in the proper temporary to avoid to losses. The shelf life of national products is 6 months and international products is 12 months including time of transportation. The company has to assess situation by calculating the inventories which will be effect to profit of company.

Thus, the company trained the new employees before operation for reduction in product line and imposed the remuneration for each persons to persuade the employee to work in efficiency and employed the experts to use the technology to support company. Additional, there is the maintenance of machines to promptly use by hiring the technicians to support and check all machines for frequency before operation. The above mention can be helped to reduce the risk.

Management and Corporate Governance

However, the company managed by hiring the professional headhunter to support the lacking of labors and manage the labors together with the chief each departments. The company imposed the remuneration, welfare and incentive, so it can keep the efficient workers. Moreover the company invested the new technology, packaging machine, controller stove or environmental adaption, to help the product line. The company are ensure the manage such the risk.

It has chance to losses. It depends on capability of each workers. Furthermore, the company uses the technology to support to transport and packaging which to be controlled by the experienced employees for avoidance of default or accidence. If the employees could not support in some part of production, it will effect to company.

Business Operation

The Risk of Labor issue The labors are important in the production such as fired process, grilled process and packaging process. The efficiency labors and the cost of labors are the significance. The majority of the labors is foreigners. So, there are highly turnover after finishing practice. The company will lose the quality the labors and waste the time and money to practice the new ones.

The Risk of efficiency in production The production is significant and association with the business, so it has to use the workers in every parts such as fired process, grilled process, sprinkled savory powder, saucing and packaging.

The Risk of repayment of Loan Some of investment comes from instituteâ&#x20AC;&#x2122;s loan and issuing bill of exchange. On December 31, 2014 company rent the money for 332.06 million baht separating to be short term loan 290.16 million baht and long term loan 41.90 million baht. The funding by issuing bill of exchange 49.56 million baht . On December 31, 2015, company rent the money for 337.15 million baht separating to be short term loan 264.70 million baht and long term loan 112.45 million baht. To maintain adequate liquidity for principal repayment by doing contract with finance institute by using Debt Service Converage Ration method and Debt to Equity Ration method. In case of breach on loan covenants, the creditors can enforce the Company to pay the penalty rate of interest and may seize the pledged collateral which harms the Companyâ&#x20AC;&#x2122;s reputation, financial stability, and financial performance materially. However, the company is always follow the regulation. In the loan contract has proportion debt per shareholder which calculate from the special budget is not more than 3.5 time in 2014 and not more than 3.0 time in 2015 and debt per shareholder is 2.33 time in the end of 2014 and 0.51 time in the end of 2015 as specify in contract. The repayment shall be paid at least 1.5 time but the capability of company in repayment is 10.06 time in 2014 and 12.67 time in 2015. The company can maintain adequate liquidity for principal repayment.

Taokaenoi Food & Marketing Public Company Limited

11.3.4 The Risk of effect to the rights or investment of shareholder

The Risk of Majority of shareholder holding more than 50 percent On December 30, 2015 Peeradechapan group held 1,020 million share equal to 73.91 % of total issued and paid share, so Peeradechapan group can control the resolution in all agenda such as promotion, voting ..etc. except the laws impose of the vote. However, the company appointed the independence board for 3 persons choosing from 8 persons. So, it shall be balanced in the proper management and transparent management and auditable. In addition, there is internal auditor is independent working under control of the Board of Auditor.

Board of Director, Managing Director Currently holding 7.17% stocks of Company and 15% stocks of Peeradechapan Holding Co., Ltd. Board of Director, Managing Director Currently holding 7.17% stocks of Company and 15% stocks of Peeradechapan Holding Co., Ltd. One Board of Director, Mr. Nutchatpong Peeradechapan One Board of Director, Mr. Itthipat Peeradechapan 3 Board of Director which are Mr. Itthipat Peeradechapan, Ms. Orrapat Peeradechapan, and Mr. Nutchatpong Peeradechapan

Mr. Nutchatpong Peeradechapan

Gen C Inspire Corporation Company Limited (“GCI”)

Chub Cheeva Company Limited

Dr. Tobi Company Limited (“Dr. Tobi”)

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Ms. Orrapat Peeradechapan

Financial Positions and Operating Results

Board of Director, Chief Executive Officer Currently holding 33.48% stocks of Company and 70% stocks of Peeradechapan Holding Co., Ltd.

Relationship

Management and Corporate Governance

Mr. Itthipat Peeradechapan

Related persons

Relationships and possible conflicts of people

In 2015, Company and affiliates have conducted transactions that are likely to cause conflict of interest, details are as follows;

12 Risk Management

Business Operation

Annual Report 2015

Taokaenoi Food & Marketing Public Company Limited

Dr. Tobi

TKN

Buyer / Client

TKN

Vendor / Service Provider

Company has provided financial and accounting services for Dr. Tobi Company for 120,000 Baht per month. Service fee is based on compensation lists provided for employees of Dr. Tobi Company. Services were completed on February 28th, 2015 - Service revenue

Company has sold products - Sales revenue

Details / Conditions

- Product and service transactions

Details of Transactions

0.24

0.07

Value (Million Baht)

Rationale of transaction Company has provided financial and accounting services for Dr. Tobi Company Rationale of price Service fee is based on compensation lists provided for employees of Dr. Tobi Company. Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price, and agreed that Company has terminated such service from March 1st, 2015 onward to separate Companyâ&#x20AC;&#x2122;s business from Dr. Tobi Company

Rationale of transaction Company sold products to Dr. Tobi Company for promotion activities Rationale of price Apply the same standard price as other customers Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price. For future transactions, pricing and sales conditions must be identified in compatible with common transactions with external parties (Armâ&#x20AC;&#x2122;s Length Basis).

Rationale and significance of transactions

TKN

TKNRF

Dr. Tobi

Dr.Tobi

TKNRF

TKNRF charged slotting allowance and promotion fee from Dr. Tobi Company, which is considered common for snack business - Promotion fee - Other receivable

TKNRF purchased products from Dr. Tobi Company to sell in shops of TKNRF. Price is compatible with price range that Dr. Tobi Company sells to other customers. - Product purchase - Account receivable

Company purchased products from Dr. Tobi Company as welfares for employees

Other Related Information

Dr.Tobi

Details / Conditions

0.022 0.007

0.022 0.017

0.50

Rationale and significance of transactions

Rationale of transaction TKNRF charged slotting allowance and promotion fee from Dr. Tobi Company, which is considered common for snack business Rationale of price Apply the same slotting allowance and promotion fee as other vendors Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price. For future transactions, pricing and sales conditions must be identified in compatible with common transactions with external parties (Arm’s Length Basis).

Rationale of transaction TKNRF purchased products from Dr. Tobi Company to sell in shops of TKNRF Rationale of price Apply the same standard price as other customers Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price. For future transactions, pricing and sales conditions must be identified in compatible with common transactions with external parties (Arm’s Length Basis).

Rationale of transaction Company purchased products from Dr. Tobi Company as welfares for employees Rationale of price Apply the same standard price as other customers Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price. For future transactions, pricing and sales conditions must be identified in compatible with common transactions with external parties (Arm’s Length Basis).

Financial Positions and Operating Results

Buyer / Client

Value (Million Baht)

Management and Corporate Governance

Vendor / Service Provider

Business Operation

Annual Report 2015

Taokaenoi Food & Marketing Public Company Limited

TKNRF

TKN

GCI

Buyer / Client

Chub Cheeva

Vendor / Service Provider

Company has rented Cloud Server of Gen C Inspire Corporation Co., Ltd. (“GCI”) for 150,000 Baht per month, with one time cost for initial installation of 100,000 Baht. Service starts from November 2015 - Expense (39,252.34 Baht is for booth rental cost in Thailand Comic Con Event and 400,000 Baht is for rental cost of Cloud Server) - Other account payables

TKNRF purchased products from Chub Cheeva Company to sell in shops of TKNRF. Price is compatible with price range that Dr. Tobi Company sells to other customers. - Product purchase - Account payable

Details / Conditions

0.43

0.44

0.012 0.009

Value (Million Baht)

Rationale of transaction Company has rented Cloud Server of Gen C Inspire Corporation Co., Ltd. (“GCI”) Rationale of price Company has benchmarked quality and price of server providers that offer Cloud Server, including CS Loxinfo, TRUE, and UIH Comments of auditing committees Auditing committees has approved transaction for renting Cloud Server of Gen C Inspire Corporation. Contract should be on year-by-year basis

Rationale of transaction TKNRF purchased products from Chub Cheeva Company to sell in shops of TKNRF Rationale of price Apply the same standard price that Chub Cheeva sold to other independent, unrelated customers Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price. For future transactions, pricing and sales conditions must be identified in compatible with common transactions with external parties (Arm’s Length Basis).

Rationale and significance of transactions

TKN Company has rented building 93/7 Rattanathibet Road, Bangraknoi, Muang, Nontaburi from Mr. Itthipat at the rate of 15,000 Baht per month for document storage. However, current contract was terminated and rental fee of new contract is 10,000 Baht per month, effective from April 1st, 2015 onward - Rental fee

TKN Company has rented building 93/7 Rattanathibet Road, Bangraknoi, Muang, Nontaburi from Mr. Nutchatpong at the rate of 15,000 Baht per month for document storage. However, current contract was terminated and rental fee of new contract is 10,000 Baht per month, effective from April 1st, 2015 onward - Rental fee

Mr. Itthipat

Mr. Nutchatpong

Other Related Information

TKN Company has rented building, 93/6, Rattanathibet Road, Bangraknoi, Muang, Nontaburi from Ms. Orrapat at the rate of 15,000 Baht per month for document storage. However, current contract was terminated and rental fee of new contract is 10,000 Baht per month, effective from April 1st, 2015 onward - Rental fee

Details / Conditions

0.135

Value (Million Baht)

Financial Positions and Operating Results

Ms. Orrapat

Vendor / Service Buyer / Provider Client

- Building rental

Rationale of transaction Company has rented building from Mr. Nutchatpong for document storage Rationale of price Updated rental fee of 10,000 Baht per month is comparable to those of nearby buildings Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price based on the fact that updated rental fee is comparable to those of nearby buildings

Rationale of transaction Company has rented building from Mr. Itthipat for document storage Rationale of price Updated rental fee of 10,000 Baht per month is comparable to those of nearby buildings Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions based on the fact that updated rental fee is comparable to those of nearby buildings

Rationale of transaction Company has rented building from Ms. Orrapat for document storage Rationale of price Updated rental fee of 10,000 Baht per month is comparable to those of nearby buildings Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions based on the fact that updated rental fee is comparable to those of nearby buildings

Rationale and significance of transactions

Management and Corporate Governance

Transactions

Business Operation

Annual Report 2015

Taokaenoi Food & Marketing Public Company Limited

TKNRF

Details / Conditions

Dr.Tobi TKNRF rented space in the building, 77, Bond Street Road from Dr. Tobi Company to locate office. Monthly rate of 144,000 per month include rental fee and service fee - Rental fee

Vendor / Service Buyer / Provider Client

1.56

Value (Million Baht)

Rationale of transaction TKNRF rented space in the building from Dr. Tobi Company to locate office. Rationale of price Calculate rental fee and service fee from space that TKNRF uses Comments of auditing committees Auditing committees have verified and accepted details and rationale of transactions and price

Rationale and significance of transactions

TKN

Buyer / Client

Other Related Information

Mr. Nutchatpong TKN

Ms. Orrapat

Vendor / Service Provider

Advance money for Companý’s Facebook Ad “TKN Club” service

Company car

Details / Conditions

0.08

2.2

Value (Million Baht)

Financial Positions and Operating Results

- Others

Rationale of transaction Board has paid service fee of Facebook Ad “TKN Club” in advance. Rationale of price Company has compensated such expenses based on actual cost. Receipt was submitted as evidence. Comments of auditing committees Auditting Committees have approved transaction based on actual cost.

Rationale of transaction Company policy states that there are allowances for acquiring car for Executive based on maximum procurement limit. However, Managing Director has been familiar with a car she is currently using, thus proposing Company to purchase as allowance. Rationale of price Company has verified normal price of car brand from websites and used car market. Comments of auditing committees Auditting Committees have approved transaction and requested review of company car procurement policies.

Rationale and significance of transactions

Management and Corporate Governance

Transactions

Business Operation

Annual Report 2015

Part 3 Financial Position and Operating Performance

Business Operation

on the Board of Directorâ&#x20AC;&#x2122;s 13 Report Responsibilities for Financial Statements Board of Directors is responsible for financial statement of Taokaenoi Food and Marketing Public Company Limited and affiliates which are prepared in accordance with generally accepted accounting principles. Company is obliged to select appropriate accounting policies and ensure consistent compliance, as well as sufficient exposure of significant data in financial statement. Auditors have examined and verified financial statement, with unqualified opinion, that financial records and statements are fairly and appropriately presented.

Management and Corporate Governance

Board of Directors have established appropriate and effective risk management system and internal control to ensure accurate, complete, timely, and sufficient for sustaining properties and preventing fraud or materially adverse business conduct. Auditting Committees have been appointed by Board of Director to examine financial report, internal control, internal audit, risk management, and disclosure of transactions. Opinions of auditing committees are included in this annual report. Board of Directors is confident that internal control and internal audit of Taokaenoi Food and Marketing Public Company Limited and affiliates as of December 31, 2015 are reliable in accordance with generally accepted accounting principle, applicable laws and regulation.

Yuth Worachattarn Chairman of the Board of Directors

Financial Positions and Operating Results

Iitthipat Peeradechapan Chief Executive Officer

Other Related Information

Annual Report 2015

Audit Committee’s 14 The Report Auditting committees of Taokaenoi Food and Marketing Public Company Limited (“Company”) consist of 3 honorary independent committees, which are Mrs. Wanee Tassanamontian, President of auditing committees, Mr. Yuth Worachattarn, auditing committee, and Mr. Chaiyong Rattanacharoensiri, auditing committee. Qualifications of all auditing committees are in compliance with Stock Exchange of Thailand (SET). All auditing committees are independent to perform their duties in accordance with audit charter and best practice of SET’s auditing committees. There are 6 meeting of auditing committees in 2015 and all auditing committees have attended meetings which involve Executives, auditors, and internal auditors. Key performances of auditing committees are summarized as follow; 1. Verification of quarterly financial statement and 2015 yearly financial statement Executives and auditors have commented in terms of accuracy and adequacy of financial disclosure and auditors have shared audit planning in 2015. Auditing committees agreed with auditors that Company’s financial statements are accurate and reliable in accordance with generally accepted accounting principle. Disclosure of financial records is sufficient and appropriate based on standard of financial report. 2. Verification of past performance and internal control Auditing committees has examined past performance and internal control to evaluate adequacy, appropriateness, and effectiveness of internal control in order to achieve business objectives. Performance and internal control are evaluated against procedures set by Securities and Exchange Commission, auditors, and internal auditors. Auditing committees agreed with auditors and internal auditors that Company’s internal control is sufficient and appropriate. Additionally, control system to monitor and direct performance of affiliates are appropriate, sufficient, and effective. 3. Verification of risk management system Risk management should be aligned with internal control to ensure thorough risk control. Auditing committees have examined risk management policies, factors, and progress and agreed that Company has applied risk management system by identifying objectives, assessing risks, following up progress, setting Key Risk Indicator – KRI based on changing circumstances, and identifying both acceptable and unacceptable risks. 4. Verification of internal audit Auditing committees have examined mission, scope of operation, roles and responsibility, and independent entity of P&L Internal Audit Co., Ltd. which is internal audit of Company. Auditing committees have also reviewed and approved amendment of internal audit charter to ensure appropriateness and updated version in accordance with internal audit procedures of Stock Exchange of Thailand. Auditing committees have approved annual audit plan which is developed based on corporate risk. Auditing committees agreed that Company has sufficient, appropriate, and effective internal audit based on generally accepted standard.

Taokaenoi Food & Marketing Public Company Limited

7. Verification about fraud Apart from internal complaint, auditing committees have established system for obtaining complaints and feedbacks of external parties regarding fraud, via either verbal or written report. Besides, complainers can report through email address of recipient in charge, sealed letter, www.taokaenoi.co.th website, manager, Human Resource Director, CEO, or one of Board of Director. There is no report via system in 2015.

Financial Positions and Operating Results

8. Appointment of auditors and audit compensation as of 2016 Auditing committees have proposed Board of Directors about Appointment of auditors and audit compensation as of 2016. Auditing committees have approved performance, independent entity, and appropriateness of compensation and proposed appointment of Ms. Wissuta Jariyathanakorn (Certified Public Accountant ID 3853) or Mrs. Poonnart Paocharoen (Certified Public Accountant ID 5238), or Ms. Manee Rattanabankit (Certified Public Accountant ID 5313) of EY Office Ltd. as auditor of Company and affiliates in 2016, with compensation of 2,600,000 Baht. During previous year, auditor has performed by applying capabilities, knowledge, expertise and suggesting about internal control and risk management. Auditor is also independent to work for Company and affiliates.

Management and Corporate Governance

6. Verification and comments about transactions or conflict of interest Auditing committees have examined transactions or conflict of interest, as well as disclosure of such information in accordance with Securities and Exchange Commision. Auditing committees agreed with auditors that significant trades or transactions of Company and related organization are reasonable and support utmost benefits of Company’s business, and disclosure of information is accurate and complete.

Business Operation

5. Verification of legal compliance Auditing committees have examined compliance to laws related to securities and Stock Exchange of Thailand and applicable laws which are related to Company’s business, compliance to Company’s regulations, and Company’s obligations to external parties. Auditing committees agreed that there is no significant issue about violation to laws, regulations, and obligations to external parties.

Wanee Tassanamontian Chairman of Audit Committee Other Related Information

Annual Report 2015

Operating Results and 15 Financial Status Income

The company and subsidiaries have sale revenue for year 2014 amount 2,695.0 million baht and year 2015 amount 3,499.7 million baht or growth rate 29.86%. The growth of domestic sale 134.7 million baht or 8.78% come from tourist market and consumption increase. The growth of export sale 670.1 million baht or 57.76% come from export to China increase 526.2 million baht or 168.7% because of company focusing and concentrate to China market since quarter4/2014 altogether with “Taokaenoi” is a well known brand in China. Table of Revenue structure

2012 THB million %

By Product

Product under Brand “Taokaenoi”

Also Indonesia market increase 51.7 million baht or 33.49% come from the recover of the import trade barrier fixing and the Rupiah weaken in year 2014. Moreover, CLMV market (Cambodia, Laos, Myanmar and Vietnam) increase 54.6 million baht or 79.42% meanwhile Malaysia market decrease 31.3 million baht or 17.38% because of the GST (Goods and Service Tax) implementation on 1 April 2015.

2013 THB million %

2014 THB million %

2015 THB million %

2,395.7

94.23

2,640.9

97.07

2,620.3

96.11

3,413.3

97.10

Product under other Brands

99.9

3.93

74.7

2.75

74.6

2.74

86.5

2.46

Total Revenue from Sales

2,495.6

98.16

2,715.6

99.82

2,695.0

98.85

3,499.7

99.56

46.8

1.84

5.0

0.18

31.3

1.15

15.5

0.44

Other Revenue Grand Total Revenue

2,542.4 100.00

2,720.6 100.00

2,726.3 100.00

3,515.2 100.00

Sale revenue is mostly of total revenue which is 98.85% in year 2014 and 99.56% in year 2015. The other revenue year 2014 amount 31.3 million baht consist of Import Duty Tax Refund from BOI privilege amount 13.4 million baht For year 2015, the other revenue amount 15.5 Million baht mostly come from Gain from Exchange Rate 6.3 million baht and Import Duty Tax Refund 2.6 million baht Table of Revenue structure By Product

2012 THB million %

2013 THB million %

2014 THB million %

2015 THB million

Crispy Seaweed

1,743.0

69.84

1,869.0

68.82

1,759.2

65.28

2,060.6

58.88

Grilled Seaweed

450.1

18.04

574.8

21.17

660.3

24.50

1,171.3

33.47

Tempura Seaweed

91.1

3.65

105.7

3.89

81.2

3.01

81.3

2.32

Roasted Seaweed

84.3

3.38

68.4

2.52

46.7

1.73

41.2

1.18

Other products under Brand “Taokaenoi”1

27.1

1.09

23.0

0.85

73.0

2.71

58.9

1.68

Taokaenoi Food & Marketing Public Company Limited

By Product

Total Revenue from Sales

2013 THB million %

2014 THB million %

2015 THB million

99.9

4.00

74.7

2.75

74.6

2.77

86.5

2.47

2,495.6

100.00

2,715.6

100.00

2,695.0

100.00

3,499.7

100.00

Business Operation

Product under other brands2

2012 THB million %

Note: 1. Other products under brand “TaoKaeNoi” are “Taokae Pop”, “Want More”, “Z Roll Farm” and such. 2. Other products are snacks and souvenirs sold at TKN Land, such as dried fruit.

By Product

2012 THB million %

2013 THB million %

2014 THB million %

2015 THB million

Statement of Comprehensive Income Sales Revenue

2,495.6

Cost of Sales

(1,788.1)

Gross Profit

707.5

100.0

2,715.6

(71.65) (1,783.0) 28.35

932.6

100.0

2,695.0

100.0

3,499.7

100.0

(65.66) (1,778.6)

(66.0)

(2,259.5)

(64.56)

34.0

1,240.3

35.44

34.34

916.4

The consolidate financial statement show cost of goods sold for year 2014 amount 1,778.6 million baht or 66% of Sale and year 2015 amount 2,259.5 million baht or 64.56% of Sale. The improvement of cost of goods sold come from the raw material cost control, the productivity increment altogether with material loss control and palm oil sourcing from bucket to tank bulk

By Product

2012 THB million %

2013 THB million %

2014 THB million %

2015 THB million

Statement of Comprehensive Income 2,495.6

100.0

2,715.6

100.0

2,695.0

100.0

3,499.7

100.0

Selling Expenses

(441.9)

(17.1)

(556.6)

(20.50)

(490.7)

(18.21)

(528.2)

(15.09)

Administrative Expenses

(139.8)

(5.60)

(190.5)

(7.23)

(182.7)

(6.78)

(215.7)

(6.16)

125.8

5.04

179.6

6.61

243.0

9.02

496.4

14.15

Operating Profit

Annual Report 2015

Other Related Information

Sales Revenue

Financial Positions and Operating Results

Cost of Goods Sold

Management and Corporate Governance

From the above table shows that almost sale revenue come from product under Brand Taokaenoi. For year 2014, the 65.28% of sale revenue come from Crispy Seaweed and 24.50% from Grilled Seaweed meanwhile for year 2015 Sale of Crispy Seaweed is 58.88% of total revenue and Grilled Seaweed is 33.47%. These mean Grill Seaweed have the cumulative average growth rate higher than the other because it is popular in China market.

Selling and Administration Expenses

Selling expenses for year 2014 is 490.7 million baht or 18.21% of sales revenue and for year 2015 is 528.2 million baht or 15.09% of sales revenue. The decrease of selling expenses come from portion of export sale more than domestic sale meanwhile the export selling expense less than domestic sale. Furthermore , the company has strictly control of selling expenses to be under the budgeting by negotiate the promotion expenses which create the added value to sale revenue. In addition, the company market share also maintain at 61.5% in year 2015 meanwhile our competitor is 17.5%, 6.6% and 4.0% respectively.

Norita 1.1% Teelek 1.2% Tawandang 4.0% Seleco 6.6%

Masita 17.5%

Other 8.1%

YR 2015 Taokaenoi 61.5%

Sorce : Ac Nielsen 2015

In the consolidated financial statement, the administration expenses for year 2014 is 182.7 million baht or 6.78% of sales revenue and for year 2015 is 215.7 million baht or 6.16% of sales revenue. Most of spending is for Human Resources which always from annual merit increase and new staff recruitment for support company growth but these incremental rate still less than the sale growth rate. And the efficiency of budget control make the percentage of administration expenses to sale revenue still maintain and slightly decrease.

Taokaenoi Food & Marketing Public Company Limited

15.2 Financial Position Asset

The company consolidate statement of financial position as of yearend 2014 and 2015 the total assets is From the company consolidate statement of financial position as of yearend 2014 and 2015 the total assets as of December 31, 2014 and 2015 are 1,276.7 million baht and 2,814.9 million baht respectively. The increase of assets in year 2015 is cash and cash equivalent account which from the initial public offer (IPO) of company stock and increase from the investment of new factory in Rojana Industrial Park and the renovation of existing factory (Noppawong Plant) for capacity improvement. As of year end 2015, the major item of asset account is Cash and Cash equivalent 1,475.6 million baht or 52.42% of total asset , Land and PPE (plant property and equipment) 549.6 million baht or 19.53% of total asset and Trade Receivable & Other Receivable 417.8 million baht

Liabilities

The company consolidate statement of financial position as of yearend 2014 and 2015 ,the total liabilities is 924.1 million baht and 971.0 million baht respectively. The increment of total liabilities as of yearend 2015 come from the long term loan for investment in new factory at Rojana Industrial Park before receiving fund from IPO (Initial Public Offering). The major items of Liabilities as of year end 2015 is Trade and Other Payable amount 475.9 million baht or 49.01% of total liabilities ,Short Term Loans from Bank amount 264.7 million baht or 27.26% of total liabilities and Long Term Loan amount 98.4 million baht or 10.13% of total liabilities.

Shareholdersâ&#x20AC;&#x2122; equity

The company consolidate statement of financial position as of yearend 2015 ,the shareholdersâ&#x20AC;&#x2122; equity is 2,814.9 million baht increase 1,538.2 million baht from yearend 2014. The main reason is premium on ordinary share which come from the differ between par value @ 0.25 Baht per share and IPO price 4.00 Baht per share meanwhile the number of IPO is 360 million shares. So, the total premium on ordinary shares amount is 1,440.0 million baht deduct the operation fee 124.6 million baht equal to 1,315.4 million baht.

Business Operation

Consolidated 16 Financial Statements Independent Auditorâ&#x20AC;&#x2122;s report

Independent Auditor's Report To the Shareholders of Taokaenoi Food & Marketing Public Company Limited

Other Related Information

Financial Positions and Operating Results

Annual Report 2015

Management and Corporate Governance

I have audited the accompanying consolidated financial statements of Taokaenoi Food & Marketing Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2015, and the related consolidated statements of comprehensive income, changes in shareholdersâ&#x20AC;&#x2122; equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Taokaenoi Food & Marketing Public Company Limited for the same period. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Taokaenoi Food & Marketing Public Company Limited and its subsidiaries and of Taokaenoi Food & Marketing Public Company Limited as at 31 December 2015, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.

Sumalee Reewarabandith Certified Public Accountant (Thailand) No. 3970 EY Office Limited Bangkok: 23 February 2016

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of financial position Statement of financial position As at 31 December 2015

Business Operation

Taokaenoi & Marketing As at 31 Food December 2015Public Company Limited and its subsidiaries (Unit: Baht) Consolidated financial statements Separate financial statements Note 2015 2014 2015 2014

1,475,572,154 417,806,408 197,319,086 31,463,952 2,122,161,600

68,063,397 468,080,712 227,999,422 17,595,890 781,739,421

1,439,244,109 454,248,133 187,824,401 30,794,020 2,112,110,663

51,238,304 507,935,363 214,968,484 16,656,398 790,798,549

11 12 13 14 15 27 16

36,657,410 39,745,095 549,604,696 10,622,957 12,443,005 43,629,844 692,703,007 2,814,864,607

36,282,973 39,745,095 391,325,996 9,289,801 4,347,396 13,968,104 494,959,365 1,276,698,786

36,657,410 40,034,073 39,745,095 535,914,177 10,331,536 8,284,342 39,098,423 710,065,056 2,822,175,719

36,282,973 40,034,073 39,745,095 369,298,690 8,661,088 4,273,607 7,815,725 506,111,251 1,296,909,800

Financial Positions and Operating Results

6 7, 8 9 10

Management and Corporate Governance

Assets Current assets Cash and cash equivalents Trade and other receivables Inventories Other current assets Total current assets Non-current assets Restricted bank deposits Investments in subsidiaries Investment property Property, plant and equipment Intangible assets Deferred tax assets Other non-current assets Total non-current assets Total assets

The accompanying notes are an integral part of the financial statements.

Other Related Information

Annual Report 2015

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of financial position (continued) Taokaenoi Food & Marketing Public Company Limited and its subsidiaries As at 31 December 2015 Statement of financial position (continued) As at 31 December 2015

(Unit: Baht)

Consolidated financial statements Separate financial statements Note 2015 2014 2015 2014

Liabilities and shareholders' equity Current liabilities 17 Short-term loans from banks 8, 18 Trade and other payables 19 Other short-term loans 20 Current portion of long-term loans Current portion of liabilities under finance 21 lease agreements Income tax payable 22 Other current liabilities Total current liabilities Non-current liabilities 20 Long-term loans 21 Liabilities under finance lease agreements 23 Provision for long-term employee benefits Other non-current liabilities Total non-current liabilities Total liabilities Shareholders' equity Share capital Registered 1,380,000,000 ordinary shares of Baht 0.25 each (2014: 300,000,000 ordinary shares of Baht 1 each) Issued and paid-up 1,380,000,000 ordinary shares of Baht 0.25 each (2014: 255,000,000 ordinary shares 24 of Baht 1 each) 24 Premium on ordinary shares Retained earnings Appropriated 25 Statutory reserve - the Company Statutory reserve - subsidiary Unappropriated Total shareholders' equity Total liabilities and shareholders' equity

264,701,479 475,915,783 14,055,991

290,155,896 450,791,338 49,555,044 8,719,859

264,701,479 459,002,817 14,055,991

290,155,896 440,349,752 49,555,044 8,719,859

4,984,816 66,745,493 25,565,477 851,969,039

16,118,572 35,046,279 13,104,825 863,491,813

3,635,955 65,847,114 24,876,792 832,120,148

14,833,172 34,904,237 12,666,225 851,184,185

98,391,937 13,343,118 6,323,370 965,927 119,024,352 970,993,391

33,183,600 22,374,309 3,864,469 1,201,576 60,623,954 924,115,767

98,391,937 11,984,589 6,121,275 116,497,801 948,617,949

33,183,600 19,666,919 3,739,032 56,589,551 907,773,736

345,000,000

300,000,000

345,000,000

300,000,000

345,000,000 1,315,440,000

255,000,000 -

345,000,000 1,315,440,000

255,000,000 -

34,500,000 282,249 148,648,967 1,843,871,216 2,814,864,607

30,000,000 282,249 67,300,770 352,583,019 1,276,698,786

34,500,000 178,617,770 1,873,557,770 2,822,175,719

30,000,000 104,136,064 389,136,064 1,296,909,800

The accompanying notes are an integral part of the financial statements.

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of comprehensive income

(Unit: Baht) Consolidated financial statements Separate financial statements Note

2014

2,694,962,112

3,430,272,098

2,632,231,444

6,273,013

8,998,224

6,315,010

8,985,115

9,252,266

22,340,550

13,657,491

26,521,265

3,515,273,568

2,726,300,886

3,450,244,599

2,667,737,824

2,259,497,264

1,778,605,657

2,236,443,896

1,755,835,229

528,187,969

490,723,910

506,618,176

456,729,266

215,672,456

182,657,471

199,642,719

165,996,044

3,003,357,689

2,451,987,038

2,942,704,791

2,378,560,539

511,915,879

274,313,848

507,539,808

289,177,285

(16,718,614)

(19,594,443)

(16,322,717)

(19,336,808)

495,197,265

254,719,405

491,217,091

269,840,477

(98,249,068)

(56,140,975)

(101,135,385)

(55,740,454)

396,948,197

198,578,430

390,081,706

214,100,023

1,315,094

1,275,867

396,948,197

199,893,524

390,081,706

215,375,890

0.38

0.19

0.37

0.21

1,051,561,644

1,020,000,000

1,051,561,644

1,020,000,000

The accompanying notes are an integral part of the financial statements.

Annual Report 2015

Other Related Information

3,499,748,289

29 Earnings per share Basic earnings per share Profit attributable to equity holders of the Company (Baht)

Weighted average number of ordinary shares (share)

2015

Financial Positions and Operating Results

Other comprehensive income: Other comprehensive income not to be reclassified to profit or loss in subsequent periods Actuarial gains, net of income tax Total comprehensive income for the year

2014

Management and Corporate Governance

Profit or loss: Revenues Sales Gains on exchange rate Other income Total revenues Expenses Cost of sales Selling expenses Administrative expenses Total expenses Profit before finance cost and income tax expenses Finance cost Profit before income tax expenses 27 Income tax expenses Profit for the year

2015

Business Operation

Taokaenoi Food & Marketing Public Company Limited and its subsidiaries For the year ended 31 December 2015 Statement of comprehensive income For the year ended 31 December 2015

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of changes in shareholdersâ&#x20AC;&#x2122; equity Taokaenoi Food & Marketing Public Company Limited and its subsidiaries For the year ended 31 December 2015 Statement of changes in shareholders' equity For the year ended 31 December 2015

(Unit: Baht) Consolidated financial statements Retained earnings

Issued and

Total

Appropriated - statutory reserve

paid-up

Premium on

share capital

ordinary shares

The Company

160,000,000

22,661,691

282,249

73,945,555

256,889,495

Profit for the year

198,578,430

Other comprehensive income for the year

1,315,094

Total comprehensive income for the year

199,893,524

95,000,000

Balance as at 1 January 2014

Increase share capital (Note 24) Dividend paid (Note 32)

95,000,000

shareholders'

Subsidiary

Unappropriated

equity

(199,200,000)

7,338,309

(7,338,309)

Balance as at 31 December 2014

255,000,000

30,000,000

282,249

67,300,770

352,583,019

Balance as at 1 January 2015

Transferred unappropriated retained earnings to statutory reserve (Note 25)

255,000,000

30,000,000

282,249

67,300,770

352,583,019

Profit for the year

396,948,197

Other comprehensive income for the year

Total comprehensive income for the year

396,948,197

90,000,000

1,315,440,000

1,405,440,000

(311,100,000)

4,500,000

(4,500,000)

345,000,000

1,315,440,000

34,500,000

282,249

148,648,967

1,843,871,216

Increase share capital (Note 24) Dividend paid (Note 32) Transferred unappropriated retained earnings to statutory reserve (Note 25) Balance as at 31 December 2015

The accompanying notes are an integral part of the financial statements.

Taokaenoi Food & Marketing Public Company Limited

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of changes in shareholdersâ&#x20AC;&#x2122; equity (continued) Taokaenoi Food & Marketing Public Company Limited and its subsidiaries Business Operation

For the year endedin shareholders' 31 December Statement of changes equity2015 (continued) For the year ended 31 December 2015

(Unit: Baht) Separate financial statements Retained earnings

Issued and

Total

paid-up

Premium on

Appropriated -

share capital

ordinary shares

statutory reserve

Unappropriated

160,000,000

22,661,691

95,298,483

277,960,174

Profit for the year

214,100,023

Other comprehensive income for the year

1,275,867

Total comprehensive income for the year

215,375,890

95,000,000

(199,200,000)

7,338,309

(7,338,309)

Balance as at 31 December 2014

255,000,000

30,000,000

104,136,064

389,136,064

Balance as at 1 January 2015

255,000,000

30,000,000

104,136,064

389,136,064

Profit for the year

390,081,706

Other comprehensive income for the year

Total comprehensive income for the year

390,081,706

90,000,000

1,315,440,000

1,405,440,000

(311,100,000)

4,500,000

(4,500,000)

345,000,000

1,315,440,000

34,500,000

178,617,770

1,873,557,770

Balance as at 1 January 2014

Dividend paid (Note 32)

equity

Management and Corporate Governance

Increase share capital (Note 24)

shareholders'

Transferred unappropriated retained earnings to statutory reserve (Note 25)

Dividend paid (Note 32)

Financial Positions and Operating Results

Increase share capital (Note 24) Transferred unappropriated retained earnings to statutory reserve (Note 25) Balance as at 31 December 2015

The accompanying notes are an integral part of the financial statements.

Other Related Information

Annual Report 2015

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of cash flows

Taokaenoi Food & Marketing Public Company Limited and its subsidiaries For the year ended 31 December 2015 Statement of cash flows For the year ended 31 December 2015 Consolidated financial statements 2015

Cash flows from operating activities Profit before tax Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities Depreciation and amortisation Write-off equipment Amortisation of premium (discount) from forward exchange contracts Allowance for doubtful accounts (reversal) Reduction of cost of inventories to net realisable value Gains on sales of equipment Reversal of allowance for impairment loss of assets Unrealised losses (gains) on exchange rate Provision for long-term employee benefits Provision for litigation cases Interest income Interest expense Profit from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade and other receivables Inventories Other current assets Other non-current assets Operating liabilities increase (decrease) Trade and other payables Other current liabilities Cash flows from operating activities Cash paid for long-term employee benefits Cash paid for income tax Cash paid for interest Net cash from operating activities

Taokaenoi Food & Marketing Public Company Limited

2015

2014

495,197,265

254,719,405

491,217,091

269,840,477

72,244,666 5,078,084

65,684,148 6,378,599

66,144,776 812,534

59,610,182 6,371,423

(172,765) 2,921,343 13,654,891 (587,789) 710,882 2,732,501 (1,068,463) 15,527,806

261,263 (344,419) 581,314 (38,295) (4,498,877) (9,549,955) 1,817,782 4,851,171 (1,247,461) 17,655,524

(172,765) 2,921,343 12,757,728 (1,066,263) 710,882 2,655,843 (957,101) 15,363,204

261,263 (156,825) 994,545 (273,943) (4,498,877) (9,571,159) 1,765,185 4,851,171 (1,141,405) 17,604,812

606,238,421

336,270,199

590,387,272

345,656,849

47,484,361 17,025,445 (13,862,881) (1,634,541)

(77,718,365) (2,519,168) (3,367,077) 3,213,330

50,897,287 14,386,355 (14,132,192) (3,205,540)

(92,742,865) (4,674,733) (3,554,508) 2,695,488

(5,185,711) 12,354,903 662,419,997 (273,600) (66,099,913) (14,889,162) 581,157,322

72,254,689 (1,094,716) 327,038,892 (40,879,515) (17,837,964) 268,321,413

(11,118,625) 12,104,818 639,319,375 (273,600) (65,657,943) (14,889,162) 558,498,670

80,070,407 (1,278,058) 326,172,580 (40,783,770) (17,787,251) 267,601,559

The accompanying notes are an integral part of the financial statements.

2014

(Unit: Baht) Separate financial statements

Taokaenoi Food & Marketing Public Company Limited and subsidiaries

Statement of cash flows (continued)

Consolidated financial statements 2015

2015

2014

(47,515) (67,118,667) (96,929,115) (2,120,000) 26,500,743 (4,000,000) 25,500,000 1,257,732 (116,956,822)

(374,437) (81,346,037) (148,697,652) (3,226,200) 3,358,308 1,046,370 (229,239,648)

(47,515) (63,073,091) (87,440,372) (2,120,000) 20,203,346 20,000,000 1,178,614 (111,299,018)

(25,005,776) (50,000,000) 112,447,928 (41,903,459) (23,941,912) 1,440,000,000 (43,200,000) (311,100,000) 1,057,296,781 1,407,508,757 68,063,397 1,475,572,154

(27,356,011) 30,000,000 (30,000,000) 26,350,000 (5,197,095) (15,103,514) 95,000,000 (199,200,000) (125,506,620) 25,857,971 42,205,426 68,063,397

(25,005,776) (50,000,000) 112,447,928 (41,903,459) (22,491,910) 1,440,000,000 (43,200,000) (311,100,000) 1,058,746,783 1,388,005,805 51,238,304 1,439,244,109

(27,356,011) 30,000,000 (30,000,000) 26,350,000 (5,197,095) (14,791,727) 95,000,000 (199,200,000) (125,194,833) 31,107,708 20,130,596 51,238,304

2,000,000 39,667,695

25,376,616 10,442,263

2,000,000 39,093,330

21,072,038 10,406,365

53,891,688 1,655,592

83,949,121 39,745,095 -

53,366,774 1,655,592

75,569,712 39,745,095 -

Other Related Information

(374,437) (81,970,951) (149,960,718) (3,226,200) 3,429,228 1,157,732 (230,945,346)

The accompanying notes are an integral part of the financial statements.

Annual Report 2015

Financial Positions and Operating Results

Supplemental cash flows information Non-cash transactions Acquisitions of equipment under finance lease agreements Undue installments of acquisitions of equipment Transfer advance payments for purchases of assets to equipment Transfer land to investment property Interest expense capitalised as cost of assets

(Unit: Baht) Separate financial statements

Management and Corporate Governance

Cash flows from investing activities Increase in restricted bank deposits Increase in advance payments for purchases of assets Acquisitions of property, plant and equipment Acquisitions of intangible assets Proceeds from sales of equipment Cash paid for short-term loans to related party Cash receipt from short-term loans to related party Interest income Net cash used in investing activities Cash flows from financing activities Decrease in short-term loans from banks Cash receipt from other short-term loans Repayment of other short-term loans Cash receipt from long-term loans Repayment of long-term loans Repayment of liabilities under finance lease agreements Proceeds from increase in share capital Cash paid for direct costs related to the share offering Dividend paid Net cash from (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

2014

Business Operation

Taokaenoi Food & Marketing Public Company Limited and its subsidiaries For the year ended 31 December 2015 Statement of cash flows (continued) For the year ended 31 December 2015

Taokaenoi Food & Marketing Public Company Limited and subsidiaries Taokaenoi Food & Marketing Public Company Limited and its subsidiaries Note to consolidated financial statements Notes consolidated statements For thetoyear ended 31 financial December 2015 For the year ended 31 December 2015 1.

General information

Taokaenoi Food & Marketing Public Company Limited (“the Company”) is a public limited company incorporated and domiciled in Thailand. The Company is principally engaged in the manufacture and distribution of fried, grilled, baked and snack seaweed. The registered office of the Company, which is its head office, is at 12/1 Moo 4, Tambon Na Mai, Amphur Lad Lum Kaew, Pathumthani. As at 31 December 2015, the Company has 6 branches (2014: 5 branches) in Nonthaburi, Pathumthani and Pranakorn Sri Ayutthaya. 2. Basis of preparation 2.1 The financial statements have been prepared in accordance with Thai Financial Reporting Standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of Taokaenoi Food & Marketing Public Company Limited (“the Company”) and the following subsidiaries incorporated in Thailand (hereinafter called as “the Group”). Percentage Company’s name Nature of business of shareholding 2015 2014 Percent Percent Taokaenoi Restaurant & Franchise Distribution of snacks and 100 100 Company Limited souvenirs Want More Industry Company 100 100 Distribution of snacks Limited Manufacture and distribution 100 NCP Trading & Supply Company 100 Limited of seasoning powder

Taokaenoi Food & Marketing Public Company Limited

Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases.

The financial statements of the subsidiaries are prepared using the same accounting period and significant accounting policies as the Company.

Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements.

Management and Corporate Governance

The Company is deemed to have control over an investee or subsidiaries if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns.

Business Operation

2.3 The separate financial statements present investments in subsidiaries under the cost method. 3.

New financial reporting standards Below is a summary of financial reporting standards that became effective in the current accounting year and those that will become effective in the future. (a) Financial reporting standards that became effective in the current year

Financial Positions and Operating Results

The Group has adopted the revised (revised 2014) and new financial reporting standards issued by the Federation of Accounting Professions which become effective for fiscal years beginning on or after 1 January 2015. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of standards. The adoption of these financial reporting standards does not have any significant impact on the Groupâ&#x20AC;&#x2122;s financial statements. However, some of these standards involve changes to key principles, which are summarised below. TAS 19 (revised 2014) Employee Benefits

Other Related Information

This revised standard requires that the entity recognise actuarial gains and losses immediately in other comprehensive income while the former standard allowed the entity to recognise such gains and losses immediately in either profit or loss or other comprehensive income, or to recognise them gradually in profit or loss. This revised standard does not have any impact on the financial statements as the Group already recognises actuarial gains and losses immediately in other comprehensive income. 2

Annual Report 2015

TFRS 10 Consolidated Financial Statements TFRS 10 prescribes requirements for the preparation of consolidated financial statements and replaces the content of TAS 27 Consolidated and Separate Financial Statements dealing with consolidated financial statements. This standard changes the principles used in considering whether control exists. Under this standard, an investor is deemed to have control over an investee if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns, even if it holds less than half of the shares or voting rights. This important change requires the management to exercise a lot of judgement when reviewing whether the Group has control over investees and determining which entities have to be included in preparation of the consolidated financial statements. This standard does not have any impact on the Groupâ&#x20AC;&#x2122;s financial statements. TFRS 12 Disclosure of Interests in Other Entities This standard stipulates disclosures relating to an entityâ&#x20AC;&#x2122;s interests in subsidiaries, joint arrangements and associates, including structured entities. This standard therefore has no financial impact on the financial statements of the Group. TFRS 13 Fair Value Measurement This standard provides guidance on how to measure fair value and stipulates disclosures related to fair value measurement. Entities are to apply the guidance under this standard if they are required by other financial reporting standards to measure their assets or liabilities at fair value. The effects of the adoption of this standard are to be recognised prospectively. This standard does not have any significant impact on the Groupâ&#x20AC;&#x2122;s financial statements. (b) Financial reporting standard that will become effective in the future During the current year, the Federation of Accounting Professions issued a number of the revised (revised 2015) and new financial reporting standards and accounting treatment guidance which is effective for fiscal years beginning on or after 1 January 2016. These financial reporting standards were aimed at alignment with the corresponding International Financial Reporting Standards. The Group's management believes that the revised and new financial reporting standards and accounting treatment guidance will not have any significant impact on the financial statements when it is initially applied.

Taokaenoi Food & Marketing Public Company Limited

Significant accounting policies

4.1 Revenue recognition Business Operation

Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting goods returned, discounts and allowances. Interest income

Management and Corporate Governance

Interest income is recognised on an accrual basis based on the effective interest rate. Dividend Dividends are recognised when the right to receive the dividends is established. 4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 4.3 Trade accounts receivable

Financial Positions and Operating Results

Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experience and analysis of debt aging. 4.4 Inventories Finished goods and work in process are valued at the lower of cost and net realisable value. The cost of inventories is measured using the standards cost method, which approximates actual cost under the first-in, first-out method and includes raw material costs, labour cost and attributable factory overheads.

Other Related Information

Merchandise inventories, raw materials, ingredient, packing materials and spare parts and supplies are valued at the lower of cost under the first-in, first-out method and net realisable value and are charged to production costs whenever consumed. 4.5 Investments Investments in subsidiaries are accounted for in the separate financial statements using the cost method. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss.

Annual Report 2015 4

4.6 Investment property Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment property is stated at cost less allowance for loss on impairment (if any). On disposal of investment property, the difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period when the asset is derecognised. 4.7 Property, plant and equipment / Depreciation Land is stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on a straight-line basis over the following estimated useful lives. Land improvement Buildings and building improvement Machinery and equipment Furniture and office equipment Motor vehicles

9 years 20 years and based on remaining period of land leases for those acquired in 2015 5 and 10 years 3 and 5 years 5 years

Depreciation is included in determining income. No depreciation is provided on land and assets under installation and construction. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 4.8 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Taokaenoi Food & Marketing Public Company Limited

4.9 Intangible assets Business Operation

Intangible assets are carried at cost less accumulated amortisation and allowance for loss on impairment of assets (if any). Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss. The useful lives of computer software are 3 years and 10 years.

Management and Corporate Governance

4.10 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Companyâ&#x20AC;&#x2122;s operations.

Financial Positions and Operating Results

4.11 Long-term leases Leases of property, plant and equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The asset acquired under finance lease is depreciated over the useful life of the asset.

Other Related Information

Leases of property, plant and equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease period. 4.12 Foreign currencies The consolidated and separate financial statements are presented in Baht, which is also the Companyâ&#x20AC;&#x2122;s functional currency. Items of each entity included in the consolidated financial statements are measured using the functional currency of that entity. Annual Report62015

Transactions in foreign currencies are translated into Baht at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rates ruling at the end of reporting period. Gains and losses on exchange are included in determining income. 4.13 Impairment of assets At the end of each reporting period, the Group performs impairment reviews in respect of the property, plant and equipment and intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Group estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. 4.14 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognised as expenses when incurred.

Taokaenoi Food & Marketing Public Company Limited

Defined benefit plans Business Operation

The Group has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Group treats these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised immediately in other comprehensive income.

Management and Corporate Governance

For the first-time adoption of TAS 19 Employee Benefits in 2011, the Group elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, as an expense on a straight-line basis over up to five years from the date of adoption. 4.15 Provisions

Financial Positions and Operating Results

Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 4.16 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax

Other Related Information

Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Group recognises deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences and tax losses carried forward to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences and tax losses carried forward can be utilised. 8 2015 Annual Report

At each reporting date, the Group reviews and reduces the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Group records deferred tax directly to shareholders' equity if the tax relates to items that are recorded directly to shareholders' equity. 4.17 Forward exchange contracts Receivables and payables arising from forward exchange contracts are translated into Baht at the rates of exchange ruling at the end of reporting period. Unrealised gains and losses from the translation are included in profit or loss. Premiums or discounts on forward exchange contracts are amortised on a straight-line basis over the contract periods. 4.18 Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between buyer and seller (market participants) at the measurement date. The Group applies a quoted market price in an active market to measure their assets and liabilities that are required to be measured at fair value by relevant financial reporting standards. Except in case of no active market of an identical asset or liability or when a quoted market price is not available, the Group measures fair value using valuation technique that are appropriate in the circumstances and maximises the use of relevant observable inputs related to assets and liabilities that are required to be measured at fair value. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy into three levels based on categories of input to be used in fair value measurement as follows. Level 1 - Use of quoted market prices in an observable active market for such assets or liabilities Level 2 - Use of other observable inputs for such assets or liabilities, whether directly or indirectly Level 3 - Use of unobservable inputs such as estimates of future cash flows At the end of each reporting period, the Group determines whether transfers have occurred between levels within the fair value hierarchy for assets and liabilities held at the end of the reporting period that are measured at fair value on a recurring basis. 5.

Significant accounting judgements and estimates The preparation of financial statements in conformity with financial reporting standards requires management to make subjective judgements and estimates regarding matters

Taokaenoi Food & Marketing Public Company Limited

that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows. Business Operation

Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgement regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. Allowance for doubtful accounts

Management and Corporate Governance

In determining an allowance for doubtful accounts, the management needs to make judgement and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Fair value of financial instruments

Financial Positions and Operating Results

In determining the fair value of financial instruments recognised in the statement of financial position that are not actively traded and for which quoted market prices are not readily available, the management exercises judgement, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of credit risk (bank and counterparty, both) liquidity, correlation and longer-term volatility of financial instruments. Change in assumptions about these factors could affect the fair value recognised in the statement of financial position and disclosures of fair value hierarchy. Property, plant and equipment / Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of plant and equipment and to review estimate useful lives and residual values when there are any changes.

Other Related Information

In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and records impairment losses when it is determined that their recoverable amount is lower than the carrying amount. This requires judgements regarding forecast of future revenues and expenses relating to the assets subject to the review. Deferred tax assets Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that taxable profit will be available against which the temporary differences and losses can be utilised. Significant management 10

Annual Report 2015

judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of estimate future taxable profits. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Litigation The Company has contingent liabilities as a result of litigation. The Companyâ&#x20AC;&#x2122;s management has used judgement to assess the results of the litigation and believes that the losses incurred will not exceed the amount of provision for liabilities from litigation recorded in the financial statements. 6.

Cash and cash equivalents

Cash Current and savings accounts Fixed deposits Total

(Unit: Thousand Baht) Consolidated financial Separate financial statements statements 2015 2014 2015 2014 830 742 150 160 1,474,043 66,629 1,438,395 50,386 699 692 699 692 1,475,572 68,063 1,439,244 51,238

As at 31 December 2015, bank deposits in savings accounts and fixed deposits of the Group are carrying interests between 0.125% and 0.90% per annum (2014: between 0.125% and 1.10% per annum) (The Company only: between 0.125% and 0.90% per annum (2014: between 0.125% and 1.10% per annum)).

Taokaenoi Food & Marketing Public Company Limited

Trade and other receivables (Unit: Thousand Baht) Separate financial statements 2015 2014

16,989

16,332

25,057 42,046

16,698 10,994 2,430 46,454

344,612

351,680

340,793

347,021

67,835 3,703 1,073 1,689 418,912

108,685 454 3,525 464,344

65,612 3,703 1,073 1,463 412,644

106,827 454 3,299 457,601

418,929 (3,755) 415,174

464,344 (795) 463,549

454,690 (3,529) 451,161

504,055 (569) 503,486

144 7 2,481 2,632 417,806

232 2,234 2,066 4,532 468,081

143 864 2,080 3,087 454,248

232 2,626 1,591 4,449 507,935

Annual Report 2015 12

Other Related Information

Financial Positions and Operating Results

Management and Corporate Governance

Trade receivables - related parties Aged on the basis of due dates Not yet due Past due 1 - 90 days 91 - 180 days 181 - 270 days Total trade receivables - related parties Trade receivables - unrelated parties Aged on the basis of due dates Not yet due Past due 1 - 90 days 91 - 180 days 181 - 270 days Over 271 days Total trade receivables - unrelated parties Total trade receivables Less: Allowance for doubtful accounts Trade receivables - net Other receivables Interest receivables - unrelated parties Other receivables - related parties Other receivables - unrelated parties Total other receivables - net Trade and other receivables - net

Business Operation

Consolidated financial statements 2015 2014

As at 31 December 2015, the Company has no outstanding trade receivables for which the Company pledged as collateral to secure short-term loans from bank (2014: Baht 82.2 million). 8.

Related party transactions The relationship between the Company and related parties are summarised below. Name Taokaenoi Restaurant & Franchise Company Limited Want More Industry Company Limited NCP Trading & Supply Company Limited 24 Projects Company Limited Thai Forward Building Company Limited Dr. Tobi Company Limited Gen C Inspire Corporation Company Limited Chubcheeva Company Limited

Relationship

Subsidiary Subsidiary Subsidiary Common shareholder / directors Common shareholder / director Common shareholder / directors Common shareholder / directors Common shareholder / director

During the years, the Group had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Group and those related parties.

Taokaenoi Food & Marketing Public Company Limited

Separate financial statements 2015 2014

Transactions with subsidiaries (Eliminated from the consolidated financial statements) Sales 85,687 3,344

1,510

123,651

6,605

Bookkeeping and financing service income Sale promotion income

240

1,696

240

175

Interest income Purchases of goods

514

504 980

500

Purchase of assets Rental expense

2,200 1,965

1,995

2,200 405

439

Sale promotion expenses Transactions with related parties Sales

Other expenses

54,106 Cost plus average margin 21% (2014: cost plus average margin 26%) 3,072 Actual cost plus margin 1,510 Rate stipulated in agreement 87,827 Cost plus average margin 6% (2014: cost plus average margin 3%) 4,149 Rate stipulated in agreement - Cost plus average margin 50% 1,696 Actual cost plus margin

Financial Positions and Operating Results

Transfer pricing policy

Management and Corporate Governance

Bookkeeping and financing service income Service and utilities charge income Purchases of goods

(Unit: Thousand Baht) Business Operation

Consolidated financial statements 2014 2015

145 Rate stipulated in agreement 461 1.50% - 2.55% per annum 619 Cost plus average margin 24% (2014: cost plus average margin 32%) - Close to market price 540 Rate stipulated in agreement - Cost plus margin

Other Related Information

Annual Report 2015

As at 31 December 2015 and 2014, the balances of the accounts between the Company and those related parties are as follows. (Unit: Thousand Baht) Consolidated financial statements 2014 2015 Trade and other receivables - related parties (Note 7) Trade receivables - related parties Subsidiaries Related company 17 Total 17 Other receivables - related parties Subsidiaries Related company 7 2,234 Total 2,234 7 Trade and other payables - related parties (Note 18) Trade payables - related parties Subsidiaries Related company 9 121 Total 9 121 Accrued expenses - related parties Subsidiaries Related company and persons 511 5 Total 5 511

Separate financial statements 2015 2014 42,046 42,046

46,454 46,454

864 864

409 2,217 2,626

13,085 13,085

17,389 82 17,471

241 511 752

1,300 1,300

Directors and managementâ&#x20AC;&#x2122;s benefits During the years ended 31 December 2015 and 2014, the Group had employee benefit expenses payable to their directors and management as below. (Unit: Thousand Baht)

Short-term employee benefits Post-employment benefits Total

Consolidated financial statements 2015 2014 30,074 31,233 1,968 2,043 32,042 33,276

Separate financial statements 2015 2014 28,345 29,639 1,964 2,038 30,309 31,677

Guarantee obligations by directors The Companyâ&#x20AC;&#x2122;s directors have guaranteed the Companyâ&#x20AC;&#x2122;s short-term loans from banks without charging guarantee fee.

Taokaenoi Food & Marketing Public Company Limited

Inventories (Unit: Thousand Baht)

9,999 60,620 78,661 11,101 3,510

(2,512) (1,393) (12,064) (565) -

(154) (253) (1,351) (644) -

3,368 104,475 41,780 9,780 2,700

9,845 60,367 77,310 10,457 3,510

1,193

21,228

1,193

21,228

215,277

232,302

(17,958)

(4,303)

197,319

227,999

Management and Corporate Governance

5,880 105,868 53,844 10,345 2,700

Business Operation

Finished goods Finished goods in transit Work in process Raw materials Packing material Ingredient Spare parts and supplies Raw materials in transit Total

Consolidated financial statements Reduce cost to net Cost realisable value Inventories - net 2014 2015 2014 2015 2014 2015 29,157 46,914 (1,424) (1,901) 27,733 45,013 6,290 269 6,290 269

(Unit: Thousand Baht)

5,880 100,766 53,216 10,892 2,037

9,987 56,786 77,919 11,607 2,610

(2,513) (814) (11,539) (565) -

(154) (13) (1,351) (644) -

3,367 99,952 41,677 10,327 2,037

9,833 56,773 76,568 10,963 2,610

1,193

21,228

1,193

21,228

204,559

218,945

(16,735)

(3,977)

187,824

214,968

Financial Positions and Operating Results

Finished goods Finished goods in transit Work in process Raw materials Packing material Ingredient Spare parts and supplies Raw materials in transit Total

Separate financial statements Reduce cost to net Cost realisable value Inventories - net 2015 2014 2015 2014 2015 2014 24,285 38,540 (1,304) (1,815) 22,981 36,725 268 6,290 268 6,290

16 2015 Annual Report

Other Related Information

During the year 2015, the Group reduced cost of inventories by Baht 18.0 million (2014: Baht 4.3 million), to reflect the net realisable value (The Company only: Baht 16.7 million (2014: Baht 4.0 million)). This was included in cost of sales. In addition, the Group reversed the write-down of cost of inventories by Baht 4.3 million (2014: Baht 3.7 million), and reduced the amount of inventories recognised as expenses during the year (The Company only: Baht 4.0 million (2014: Baht 3.0 million)).

10. Other current assets

Value added tax refundable Advances for purchases of raw materials Prepaid expenses Other current assets Total

Consolidated financial statements 2014 2015 21,974 5,938 1,860 7,494 136 31,464

(Unit: Thousand Baht)

Separate financial statements 2015 2014 21,465 5,405

7,942 3,227 489 17,596

1,859 7,334 136 30,794

7,942 2,869 440 16,656

11. Restricted bank deposits These represent savings and fixed deposits pledged with the banks to secure credit facilities. 12. Investments in subsidiaries Details of investments in subsidiaries as presented in the separate financial statements are as follows.

Companyâ&#x20AC;&#x2122;s name

Paid-up capital 2015 2014

Taokaenoi Restaurant & Franchise Company Limited 35,000 35,000 Want More Industry Company Limited 5,000 5,000 NCP Trading & Supply Company Limited 1,000 1,000 Total

Shareholding percentage 2015 2014 (%) (%)

(Unit: Thousand Baht)

100

2015

Cost

2014

35,000 4,543

491

40,034

For the years ended 31 December 2015 and 2014, no dividend income was received from the above subsidiaries. 13. Investment property During the year 2014, the Company transferred land with net book value as at 31 December 2014 amounting to Baht 39.7 million to investment property, since the Companyâ&#x20AC;&#x2122;s intentions regarding the use of the land have changed and it now plans to sell it in the future. The Company arranged for an accredited independent valuer to appraise the value of the investment property. As at 31 December 2015, the fair value of the land was determined to be Baht 42.1 million on the basis of market price (2014: Baht 42.1 million). 17

Taokaenoi Food & Marketing Public Company Limited

14. Property, plant and equipment (Unit: Thousand Baht) Consolidated financial statements Land and Buildings and land building improvement improvement

Machinery and equipment

Furniture and office equipment

Motor vehicles

Assets under installation and construction

Total

(102,963) 44,912 206,894 1,656 (84,484) 168,978

(39,745) 645,029 235,077 (42,523) 1,656 839,239

202,183 63,881

(12,361) 253,703 70,352

(34,421) 289,634

4,498 (4,498) -

44,912 168,978

391,326 549,605 63,881 70,352

Annual Report 2015

Other Related Information

517,906 212,397 (45,529)

Financial Positions and Operating Results

38,687 109,188 -

Management and Corporate Governance

Cost 1 January 2014 57,664 88,105 251,061 59,737 22,652 Additions 58,585 377 29,486 11,027 3,734 Disposals/write-off (5,385) (31,802) (6,088) (2,254) Transfer to investment property (39,745) Transfer in (out) 41,129 47,826 14,008 31 December 2014 76,504 124,226 296,571 78,684 24,132 Additions 5,400 65 5,615 7,988 9,115 Disposals/write-off (21,464) (14,834) (6,225) Capitalised interest Transfer in (out) 44,615 33,600 6,269 31 December 2015 81,904 168,906 314,322 78,107 27,022 Accumulated depreciation 1 January 2014 539 9,496 154,133 30,656 7,359 Depreciation for the year 223 4,801 41,956 12,583 4,318 Depreciation on (732) (5,806) (3,997) (1,826) disposals/write-off 31 December 2014 762 13,565 190,283 39,242 9,851 Depreciation for the year 223 8,890 41,404 14,970 4,865 Depreciation on (20,902) (9,602) (3,917) disposals/write-off 31 December 2015 22,455 210,785 44,610 10,799 985 Allowance for impairment loss 1 January 2014 2,912 1,586 Reversed during the year (2,912) (1,586) 31 December 2014 31 December 2015 Net book value 31 December 2014 75,742 110,661 106,288 39,442 14,281 31 December 2015 80,919 146,451 103,537 33,497 16,223 Depreciation for the years 2014 (Baht 47.0 million included in manufacturing cost, and the balance in selling and administrative expenses) 2015 (Baht 48.4 million included in manufacturing cost, and the balance in selling and administrative expenses)

Business Operation

The Company had pledged the investment property with net book values as at 31 December 2015 amounting to Baht 36.2 million (2014: Baht 36.2 million) as collateral to secure long-term loan received from a bank. Subsequently, the Company redeemed the pledged asset on 20 January 2016.

(Unit: Thousand Baht) Separate financial statements Land and Buildings and land building improvement improvement

Machinery and equipment

Furniture and office equipment

Motor vehicles

Assets under installation and construction

Cost 1 January 2014 57,664 86,990 250,008 41,320 22,652 37,934 Additions 58,585 377 24,623 6,121 3,385 97,475 Disposals/write-off (5,385) (27,376) (1,335) (2,254) Transfer to investment property (39,745) Transfer in (out) 41,130 39,240 10,127 (90,497) 31 December 2014 76,504 123,112 286,495 56,233 23,783 44,912 Additions 5,400 65 5,160 6,117 9,115 206,894 Disposals/write-off (21,464) (3,756) (6,225) Capitalised interest 1,656 Transfer in (out) 44,615 33,600 6,269 (84,484) 31 December 2015 81,904 167,792 303,791 64,863 26,673 168,978 Accumulated depreciation 1 January 2014 539 9,366 153,787 21,578 7,358 Depreciation for the year 223 4,700 40,618 8,415 4,264 Depreciation on (732) (5,424) (1,126) (1,826) disposals/write-off 31 December 2014 762 13,334 188,981 28,867 9,796 Depreciation for the year 223 8,790 39,397 11,384 4,795 Depreciation on (20,902) (3,423) (3,917) disposals/write-off 31 December 2015 22,124 207,476 36,828 10,674 985 Allowance for impairment loss 1 January 2014 2,912 1,586 Reversed during the year (2,912) (1,586) 31 December 2014 31 December 2015 Net book value 31 December 2014 75,742 109,778 97,514 27,366 13,987 44,912 31 December 2015 80,919 145,668 96,315 28,035 15,999 168,978 Depreciation for the years 2014 (Baht 46.7 million included in manufacturing cost, and the balance in selling and administrative expenses) 2015 (Baht 48.1 million included in manufacturing cost, and the balance in selling and administrative expenses)

Total

496,568 190,566 (36,350) (39,745) 611,039 232,751 (31,445) 1,656 814,001 192,628 58,220 (9,108) 241,740 64,589 (28,242) 278,087 4,498 (4,498) 369,299 535,914 58,220 64,589

As at 31 December 2015, the Company had an outstanding balance of factory under construction amounting to Baht 129.4 million (2014: none). The construction has been financed with short-term and long-term loans from banks. Borrowing costs amounting to Baht 1.6 million were capitalised as cost of assets during the year ended 31 19

100

Taokaenoi Food & Marketing Public Company Limited

December 2015. The weighted average rate of 4.1% has been used to determine the amount of borrowing costs eligible for capitalisation. Business Operation

As at 31 December 2015, the Group had machineries and vehicles under finance lease agreements with net book values amounting to Baht 23.9 million (2014: Baht 45.6 million) (the Company only: Baht 20.7 million (2014: Baht 41.5 million)). As at 31 December 2015, certain equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounting to Baht 118.5 million (2014: Baht 69.6 million) (the Company only: Baht 115.3 million (2014: Baht 68.7 million)).

Management and Corporate Governance

As at 31 December 2015, the Company had buildings and structures located on leased land with net book values amounting to Baht 78.8 million (2014: Baht 63.5 million). Under the land lease agreements, the Company has to transfer ownership of the buildings and structures to the lessors when the agreements are terminated. The Company has pledged land with structures with net book values as at 31 December 2015 amounting to Baht 259.1 million (2014: Baht 60.7 million) as collateral against long-term loans received from banks. 15. Intangible assets

Financial Positions and Operating Results

The net book values of intangible assets as at 31 December 2015 and 2014 are presented below. (Unit: Thousand Baht) Computer software Consolidated Separate financial statements financial statements 18,435 (7,812) 10,623

16,350 (6,018) 10,332

15,208 (5,918) 9,290

13,124 (4,463) 8,661

Annual Report 20 2015

Other Related Information

As at 31 December 2015 Cost Less: Accumulated amortisation Net book value As at 31 December 2014 Cost Less: Accumulated amortisation Net book value

101

A reconciliation of the net book values of intangible assets for the years 2015 and 2014 is presented below. (Unit: Thousand Baht) Consolidated financial statements 2014 2015 9,290 8,973 3,226 2,120 (1,803) (1,893) 10,623 9,290

Net book value at beginning of year Acquisitions Amortisation Net book value at end of year

16. Other non-current assets Consolidated financial statements 2015 2014 6,262 6,939 34,488 6,409 2,880 620 13,968 43,630

Deposits and guarantees Advances for purchases of assets Other non-current assets Total

17. Short-term loans from banks

Promissory notes Trust receipts Export bills drawn under letters of credit Total

Interest rate (% per annum) 2015 2014 3.00 - 3.10 3.40 - 3.60 2.00 - 3.30 2.00 - 3.70 -

6.75

Separate financial statements 2015 2014 8,661 7,931 3,226 2,120 (1,555) (1,390) 10,332 8,661

(Unit: Thousand Baht) Separate financial statements 2015 2014 1,861 997 34,388 6,409 2,849 410 39,098 7,816

(Unit: Thousand Baht) Consolidated/Separate financial statements 2015 2014 152,475 177,788 112,226 110,571 264,701

1,797 290,156

As at 31 December 2015, short-term loans from banks are secured by the Company’s directors, savings and fixed deposits, and land with structures of the Company’s directors. As at 31 December 2014, short-term loans from banks were secured by the Company’s directors, fixed deposits, certain trade receivables and land with structures of the Company’s directors.

102

Taokaenoi Food & Marketing Public Company Limited

39,668 475,916

39,093 459,003

10,443 450,791

Management and Corporate Governance

Trade payables - related parties Trade payables - unrelated parties Accrued expenses - related parties Accrued expenses - unrelated parties Other payables for purchases of assets - unrelated parties Total

Consolidated financial statements 2015 2014 9 121 245,818 258,432 511 5 189,910 181,790

(Unit: Thousand Baht) Separate financial statements 2015 2014 13,085 17,471 220,257 233,016 752 1,300 185,816 178,157

Business Operation

As at 31 December 2015, the Companyâ&#x20AC;&#x2122;s short-term credit facilities which have not yet been drawn amounting to Baht 1,295.0 million and USD 17.8 million (2014: Baht 673.8 million and USD 9.2 million). 18. Trade and other payables

10,406 440,350

19. Other short-term loans

Financial Positions and Operating Results

Bills of exchange - at face value Less: Prepaid interest expense Net

(Unit: Thousand Baht) Consolidated/Separate financial statements 2015 2014 50,000 (445) 49,555

As at 31 December 2014, other short-term loans of the Company were bills of exchange, carried interest at a rate of 4.0% per annum and repayable in March 2015. These short-term loans were unsecured.

Other Related Information

22 2015 Annual Report

103

20. Long-term loans

Loan 1 2

Loan 3 4

Interest rate (% per annum) Repayment schedule (1) 5.625 monthly with at least installments of Baht 275,000 commencing from March 2011 to February 2018 (2) 5.63 monthly with at least installments of Baht 166,667 commencing from July 2012 to June 2017

Interest rate (% per annum) Repayment schedule (3) 5.13 monthly with at least installments of Baht 338,000 commencing from November 2014 to April 2021 (4) 4.10 monthly with installments of Baht 4,685,330 commencing from October 2016 to September 2018

Total Less: Portion due within one year Portion due more than one year

(Unit: Thousand Baht) Consolidated/Separate financial statements 2015 2014 -

11,230

5,000

(Unit: Thousand Baht) Consolidated/Separate financial statements 2015 2014 -

25,674

112,448 112,448 (14,056) 98,392

41,904 (8,720) 33,184

(1)

Interest at the rate of MLR-1% per annum for the first year to the third year, MLR1.5% per annum for the forth year and for the fifth year onward at the rate of MLR0.5% per annum. (2) Interest at the rate of MLR-1.5% per annum. (3) Interest at the rate of MLR-1.75% per annum for the first year to the second year, MLR-1.5% per annum for the third year to the forth year and for the fifth year onward at the rate of MLR-1.25% per annum. (4) Interest at the rate of MLR-2.75% per annum. In December 2015, the Company made full repayments of loans No. 1 to 3 prior to the due dates stipulated in the agreements. There were no finance fee obligations as a result of these repayments.

104

Taokaenoi Food & Marketing Public Company Limited

Business Operation

Movements in the long-term loans account during the year ended 31 December 2015 are summarised below. (Unit: Thousand Baht) Consolidated/Separate financial statements Balance as at 1 January 2015 41,904 Add: Addition 112,448 Less: Repayment (41,904) Balance as at 31 December 2015 112,448

Management and Corporate Governance

On 20 October 2015, the Company drew down Baht 112.4 million from the credit facility granted under the Baht 400.0 million secured loan agreement with a bank, dated 26 August 2015, obtained for the purpose of acquiring land and equipment and constructing a new factory. The agreement contains covenants pertaining to matters including the maintenance of the shareholding of the major shareholders and certain financial ratios stipulated in the agreement, such as debt to equity and debt service coverage ratios. As at 31 December 2015, the Company has undrawn credit facility granted under the secured long-term loan agreement amounting to Baht 287.6 million (2014: none).

Financial Positions and Operating Results

21. Liabilities under finance lease agreements (Unit: Thousand Baht) Consolidated financial statements 2014 2015 19,587 (1,259) 18,328 (4,985) 13,343

41,297 (2,804) 38,493 (16,119) 22,374

16,745 (1,124) 15,621 (3,636) 11,985

37,005 (2,505) 34,500 (14,833) 19,667

Other Related Information

Liabilities under finance lease agreements Less: Deferred interest expenses Total Less: Portion due within one year Portion due more than one year

Separate financial statements 2015 2014

The Group entered into finance lease agreements with leasing companies for rental of machineries and vehicles for use in its operations, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are generally between 3 and 5 years. In November and December 2015, the Company fully settled liabilities under a number of finance lease agreements prior to the due dates stipulated in the agreements, together with the related finance fees charged by lessors for such repayments. 24

Annual Report 2015

105

Future minimum lease payments required under the finance lease agreements were as follows.

Future minimum lease payments Deferred interest expenses Present value of future minimum lease payments

(Unit: Thousand Baht) As at 31 December 2015 Consolidated financial Separate financial statements statements Less Less than 1 1 - 5 than 1 1 - 5 year years Total year years Total 5,649 13,938 19,587 4,199 12,546 16,745 (664)

(595) (1,259)

4,985 13,343 18,328

16,119

Payables to the Revenue Department Provision for litigation cases Advances received from customers Forward exchange contract payables Other current liabilities Total

Taokaenoi Food & Marketing Public Company Limited

(561) (1,124)

3,636 11,985 15,621

(Unit: Thousand Baht) As at 31 December 2014 Consolidated financial Separate financial statements statements Less Less than 1 1 - 5 than 1 1 - 5 year years Total year years Total 17,495 23,802 41,297 16,045 20,960 37,005 (1,376) (1,428) (2,804) (1,212) (1,293) (2,505) 22,374 38,493 14,833

22. Other current liabilities

106

(563)

Consolidated financial statements 2015 2014 5,203 4,158 6,231 6,231 7,123 1,610 679 426 6,329 680 25,565 13,105

19,667

34,500

(Unit: Thousand Baht) Separate financial statements 2015 2014 4,848 3,854 6,231 6,231 6,866 1,610 679 426 6,253 545 24,877 12,666

23. Provision for long-term employee benefits

(Unit: Thousand Baht) Separate financial statements 2015 2014

5,185 966 104

4,476 1,780 139

5,043 928 100

(274) 6,323 -

(233) 381 (1,792) (1,644) 4,611 (747)

(274) 6,121 -

(202) 368 (1,761) (1,595) 4,476 (737)

6,323

3,864

6,121

3,739

Financial Positions and Operating Results

4,611 1,843 143

Management and Corporate Governance

Defined benefit obligations at beginning of year Current service cost Interest cost Actuarial gains (losses): Demographic assumptions changes Financial assumptions changes Experience adjustments Total Benefits paid during the year Defined benefit obligations at end of year Unrecognised transitional provisions Provision for long-term employee benefits at end of year

Consolidated financial statements 2015 2014

Business Operation

Provision for long-term employee benefits as at 31 December 2015 and 2014, which represents compensation payable to employees after they retire, was as follows.

Long-term employee benefit expenses included in the profit or loss consist of the following. (Unit: Thousand Baht)

Current service cost Interest cost Transitional liability recognised during the 747 747 year Total 2,733 1,817 Line items in profit or loss under which such expenses are included Cost of sales 1,788 1,211 Selling and administrative expenses 945 606 Total 2,733 1,817

Separate financial statements 2015 2014 1,780 928 139 100 737 2,656

737 1,765

1,738 918 2,656

1,187 578 1,765

262015 Annual Report

Other Related Information

Consolidated financial statements 2015 2014 1,843 966 143 104

107

For the year ended 31 December 2014, the actuarial gains (net of actuarial losses) - net of income tax, which was recognised in other comprehensive income of the Group, amounted to Baht 1,315 thousand (The Company only: Baht 1,276 thousand). The Group expects to pay Baht 50 thousand of long-term employee benefits during the next year (2014: Baht 274 thousand) (the Company only: Baht 50 thousand (2014: Baht 274 thousand)). As at 31 December 2015, the weighted average duration of the liabilities for long-term employee benefit is 27.2 years (2014: 27.2 years) (the Company only: 26.9 years (2014: 26.9 years)). Significant actuarial assumptions are summarised below.

Discount rate Salary increase rate Staff turnover rate Daily employee Monthly employee

Consolidated/Separate financial statements 2014 2015 (% per annum) (% per annum) 3.3 3.3 3.5 and 6.0 3.5 and 6.0 0 to 40 0 to 30

0 to 40 0 to 30

The result of sensitivity analysis for significant assumptions that affect the present value of the long-term employee benefit obligation as at 31 December 2015 are summarised below. (Unit: Thousand Baht) Consolidated Separate financial statement financial statements Increase (decrease) Increase (decrease) Discount rate Increase by 1% Decrease by 1% Salary increase rate Increase by 1% Decrease by 1% Staff turnover rate Increase by 20% of base in each age Decrease by 20% of base in each age

108

(615.1) 716.0

(592.6) 688.7

758.5 (662.3)

730.0 (638.4)

(1,337.6) 2,056.1

(1,290.1) 1,969.4 27

Taokaenoi Food & Marketing Public Company Limited

24. Share capital Business Operation

a) In September and November 2014, the Company received share subscription from the existing shareholders amounting to Baht 95 million. The Company registered the increase in its share capital with the Ministry of Commerce on 4 December 2014.

Management and Corporate Governance

b) In July 2015, the Company registered the decrease and the increase of its registered share capital with the Ministry of Commerce in accordance with the resolutions approved by the Extraordinary General Meeting of the Company’s shareholders held on 30 June 2015, as detailed below. - A decrease in the Company’s registered share capital from Baht 300 million (300 million ordinary shares of Baht 1 each) to Baht 255 million (255 million ordinary shares of Baht 1 each).

Financial Positions and Operating Results

- An increase in the Company’s registered share capital from Baht 255 million (255 million ordinary shares of Baht 1 each) to Baht 345 million (345 million ordinary shares of Baht 1 each) through the issue of 90 million ordinary shares, with a par value of Baht 1 each. c) In September 2015, the Company registered a change in the par value of its ordinary shares with the Ministry of Commerce, in accordance with the resolution passed by the Extraordinary General Meeting of the Company’s shareholders held on 3 September 2015 to approve a change in the par value from Baht 1 per share to Baht 0.25 per share, such that the Company’s registered share capital of Baht 345 million would comprise 1,380 million ordinary shares with a par value of Baht 0.25 each and the Company’s issued and paid-up share capital of Baht 255 million would comprise 1,020 million ordinary shares at par value of Baht 0.25 each.

Other Related Information

d) During 25 to 27 November 2015, the Company made an initial public offering of 360 million additional ordinary shares at a price of Baht 4 per share, received full settlement of the additional share capital on 30 November 2015. Direct costs attributable to the share offering net of income tax, amounting to Baht 34.6 million, are presented as a deduction from the premium on ordinary shares. The Company registered the increase in its paid-up capital with the Ministry of Commerce on 30 November 2015. The Stock Exchange of Thailand (SET) has approved the listing of the ordinary shares of the Company as securities on the SET, to be traded from 3 December 2015.

Annual Report 282015

109

25. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside a statutory reserve at least 5% of its net profit for the year after deducting accumulated deficit brought forward (if any), until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distribution. At present, the statutory reserve has fully been set aside. Pursuant to Section 1202 of the Thai Civil and Commercial Code, the subsidiaries are required to set aside a statutory reserve at least 5% of their profit each time the subsidiaries pay out a dividend, until the reserve reaches 10% of their registered share capital. The statutory reserve is not available for dividend distribution. 26. Expenses by nature Significant expenses by nature are as follows. Consolidated financial statements 2014 2015 Salary, wages and other employee benefits 585,613 Depreciation 70,352 Amotisation 1,893 Rental expenses from operating lease agreements 24,715 Transportation expenses 64,832 Utilities and energy expenses 37,410 Sale promotion and marketing expenses 352,057 Raw materials and consumables used 1,681,431 Changes in inventories of finished goods and work in process 15,855

110

Taokaenoi Food & Marketing Public Company Limited

(Unit: Thousand Baht)

Separate financial statements 2015 2014

484,110 63,881 1,803

562,350 64,589 1,555

456,470 58,220 1,390

29,358 48,123 31,520 317,409 1,292,767

21,317 64,713 36,731 357,513 1,680,787

23,673 47,856 30,483 315,838 1,292,145

9,959

12,340

10,529

106,345

56,186

105,145

55,994

(8,096)

(45)

(4,010)

(254)

98,249

56,141

101,135

55,740

Management and Corporate Governance

Current income tax Current income tax charge Deferred tax Relating to origination and reversal of temporary differences Income tax expenses reported in the statements of comprehensive income

Consolidated financial statements 2015 2014

(Unit: Thousand Baht) Separate financial statements 2015 2014

Business Operation

27. Income tax Income tax expenses for the years ended 31 December 2015 and 2014 are made up as follows.

The amounts of income tax relating to each component of other comprehensive income for the years ended 31 December 2015 and 2014 are as follows.

Financial Positions and Operating Results

Deferred tax on actuarial gains

Consolidated financial statements 2015 2014 329

(Unit: Thousand Baht) Separate financial statements 2015 2014 319

Other Related Information

30 2015 Annual Report

111

The reconciliation between accounting profit and income tax expenses is shown below.

Accounting profit before tax Applicable tax rate Accounting profit before tax multiplied by applicable tax rate Effect of elimination Unrecognised deferred tax assets were utilised during the year Deferred tax assets which were not recognised during the year Deferred tax assets initially recognised during the year Effects of: Non-deductible expenses Additional expense deductions allowed Others Total Income tax expenses reported in the statements of comprehensive income

Consolidated financial statements 2015 2014 495,197 254,719 20%

20%

99,039 (164)

50,944 225

98,243 -

53,968 -

(592)

1,879

(4,027)

4,365 (398) (7) 3,960

2,743 (372) 722 3,093

3,292 (398) (2) 2,892

2,222 (372) (78) 1,772

98,249

56,141

101,135

55,740

The components of deferred tax assets are as follows.

Deferred tax assets Allowance for doubtful accounts Allowance for diminution in value of inventories Temporary differences of finance lease agreements Provision for litigation cases Provision for long-term employee benefits Unrealised losses from forward exchange contracts Unused tax losses Others Total

112

Taokaenoi Food & Marketing Public Company Limited

(Unit: Thousand Baht) Separate financial statements 2015 2014 491,217 269,840

Consolidated financial statements 2015 2014

(Unit: Thousand Baht) Separate financial statements 2015 2014

918

289

873

289

3,592

861

3,347

795

1,298 1,246 1,265

997 1,246 755

1,211 1,246 1,224

997 1,246 748

136 3,741 247 12,443

85 114 4,347

136 247 8,284

85 114 4,274 31

Business Operation

As at 31 December 2015, the subsidiaries have deductible temporary differences and unused tax losses totaling Baht 0.4 million (2014: Baht 21.3 million), on which deferred tax assets have not been recognised as the subsidiaries believe future taxable profits may not be sufficient to allow utilisation of the temporary differences and unused tax losses. The subsidiariesâ&#x20AC;&#x2122; unused tax losses for which no deferred tax assets have been recognised of Baht 0.4 million (2014: Baht 21.0 million) will gradually expire within the year 2020 (2014: year 2019). 28. Promotional privileges

Certificate No. Promotional privileges for 1. Exemption from import duty on machinery as approved by the Board of Investment.

1433/2553 1514(2)/2554 2155(2)/2554 2103(2)/2557 Granted (Not yet exercised)

Granted

8 years (Not yet exercised)

7 years (Not yet exercised)

8 years (Not yet exercised)

3. Exemption from import duty on Granted imported and essential raw materials used in manufacturing for export sales for a period of 1 year commencing as from the first importation date. However, the promotion period was extended.

Granted (Not yet exercised)

Granted 4. Exemption from import duty on items imported for re-export, for a period of 1 year commencing as from the first importation date. However, the promotion period was extended.

Granted (Not yet exercised)

Annual Report 2015

Other Related Information

Granted

Financial Positions and Operating Results

Granted (expired)

2. Exemption from corporate income tax on net profit from the promoted operations.

Management and Corporate Governance

The Company has received promotional privilege from the Board of Investment for the manufacture of seaweed products and snacks made from flour, under certain significant conditions. Significant privileges of the Company are as follows.

113

29. Basic earnings per share Basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year. The Company adjusted the number of ordinary shares for the year ended 31 December 2014, in proportion to the change in the number of ordinary shares as a result of the change in par value from Baht 1 each to Baht 0.25 each, which approved on 3 September 2015 by the Extraordinary General Meeting of the Companyâ&#x20AC;&#x2122;s shareholders, as described in Note 24 c) to financial statements, as if the share split had occurred at the beginning of the earliest period reported. 30. Segment information Operating segment information is reported in a manner consistent with the internal reports of the Group that are regularly reviewed by the chief operating decision maker in order to make decisions about the allocation of resources to the segment and assess its performance. For management purposes, the Group is organised into business units based on its products and has 3 reportable segments as follows. 1) Snacks segment represents as a manufacture and distribution of fired, grilled, baked and snack seaweed in both domestic and export markets. 2) Restaurants segment represents as a retailer of snack, food and beverage and franchises. 3) Seasoning powder segment represents as a manufacture and distribution of seasoning powder used for seaweed snack, whereby the Company is main target customer. No operating segments have been aggregated to form the above reportable operating segments. The chief operating decision maker monitors the operating results of the business units separately for the purpose of making decisions about resource allocation and assessing performance. Segment performance is measured based on operating profit or loss, total assets and total liabilities and on a basis consistent with that used to measure operating profit or loss, total assets and total liabilities in the financial statements. The basis of accounting for any transactions between reportable segments is consistent with that for third party transactions.

114

Taokaenoi Food & Marketing Public Company Limited

Segment profit Segment total assets Increase (decrease) of non-current assets other than financial instruments and deferred tax assets Segment total liabilities

Segment profit (loss)

Segment total liabilities

396

397

2,825

2,912

(97)

2,815

199

(10)

189

949

1,027

(56)

971

Manufacture and distribution of snack 2,578 55 1 (18) (60) (56) (5) 4

(Unit: Million Baht) For the year ended 31 December 2014 Manufacture and Franchising distribution Total and of seasoning Eliminations Consolidated segments restaurant powder 117 2,695 2,695 89 144 (144) 1 1 (18) (18) (5) (1) (66) (66) (56) (56) (5) (5) 4 4

213

(13)

200

(1)

199

1,300

1,385

(108)

1,277

101

908

989

(65)

924

Annual 34 Report 2015

Other Related Information

Segment total assets Increase of non-current assets other than financial instruments and deferred tax assets

390

Financial Positions and Operating Results

Revenues from external customers Inter-segment revenues Interest income Interest expense Depreciation and amortisation Income tax expenses Provision for litigation cases Reversal of impairment of assets

(Unit: Million Baht) For the year ended 31 December 2015 Manufacture and Franchising distribution Total and of seasoning Eliminations Consolidated segments restaurant powder 156 3,500 3,500 1 123 210 (210) 1 1 (15) (15) (5) (1) (72) (72) 4 (1) (98) (98)

Management and Corporate Governance

Revenues from external customers Inter-segment revenues Interest income Interest expense Depreciation and amortisation Income tax expenses

Manufacture and distribution of snack 3,344 86 1 (15) (66) (101)

Business Operation

The following table presents revenues, profit (loss) and total assets and liabilities information regarding the Groupâ&#x20AC;&#x2122;s operating segments for the years ended 31 December 2015 and 2014.

115

The Group operates in Thailand only. As a result, all of the revenues, assets and liabilities as reflected in these consolidated financial statements pertain exclusively to this geographical reportable segment. Revenues from external customers based on locations of the customers for the years ended 31 December 2015 and 2014 are as follows. Country Thailand China Indonesia Malaysia Hong Kong Singapore Taiwan Others Total

2015 1,669 838 206 149 110 103 77 348 3,500

(Unit: Million Baht) 2014 1,535 312 155 180 109 103 80 221 2,695

For the year 2015, the Company has revenues from 3 major customers in amount of Baht 1,499 million (2014: Baht 1,043 million derived from 2 major customers), arising from sales by the manufacture and distribution of snack segment. 31. Provident fund The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The Company and its employees contribute to the fund monthly at the rate of 3% - 7% of basic salary. The fund, which is managed by Krung Thai Asset Management Public Company Limited, will be paid to employees upon termination in accordance with the fund rules. The contributions for the year 2015 amounting to Baht 5.6 million (2014: Baht 4.3 million) were recognised as expenses.

116

Taokaenoi Food & Marketing Public Company Limited

32. Dividends

Final dividend for the year 2013

Approved by

0.125

20,000

0.56

89,600

0.56

89,600 199,200

0.38

96,900

0.50

127,500

0.085

86,700 311,100

Annual General Meeting of the Shareholders on 18 March 2014 160,000 Interim dividend for the year 2014 Board of Directors' meeting on 13 August 2014 160,000 Interim dividend for the year 2014 Board of Directors' meeting on 13 November 2014 160,000 Total for 2014 Annual General Meeting of the Shareholders on 24 March 2015 255,000 Interim dividend for the year 2015 Board of Directors' meeting on 7 August 2015 255,000 Interim dividend for the year 2015 Board of Directors' meeting on 6 November 2015 1,020,000 Total for 2015

Management and Corporate Governance

Total dividends (Thousand Baht)

Business Operation

Dividends

Dividend Shares per share (Thousand (Baht) shares)

Final dividend for the year 2014

Other Related Information

36 2015 Annual Report

Financial Positions and Operating Results

33. Commitments and contingent liabilities 33.1 Capital commitments As at 31 December 2015, the Group had capital commitments of Baht 134.1 million, (2014: Baht 2.1 million), relating to purchases of machinery and equipment and construction of factory buildings. 33.2 Commitments under operating lease and service agreements The Group entered into several lease agreements in respect of the lease of land, building space and office and service agreements. The terms of the agreements are generally between 1 and 18 years. Future minimum payments required under these agreements were as follows. (Unit: Million Baht) Separate Consolidated financial statements financial statements 31 December 31 December 31 December 31 December Payable 2015 2014 2015 2014 In up to 1 year 28.1 16.8 21.0 6.7 In over 1 and up to 5 year 31.5 22.3 24.9 13.1 In over 5 years 18.0 8.8 18.0 8.8

117

33.3 Commitments under purchase of raw material agreement The Company entered into the agreements to purchase raw materials from overseas suppliers, for period, in quantities and at prices stipulated in the agreements. As at 31 December 2015 and 2014, the Company had no commitment under these agreements. 33.4 Guarantees As at 31 December 2015, there were outstanding bank guarantees of Baht 3.2 million (2014: Baht 2.9 million) issued by banks on behalf of the Company in respect of certain performance bonds as required in the normal course of business of the Company. These included letters of guarantee to guarantee electricity use and others. 33.5 Litigations a) On 23 September 2010, a company filed a civil lawsuit against the Company for breach of contract, claiming compensation for damages amounting to Baht 1.4 million. The Company therefore recorded the compensation claim of Baht 1.4 million in the 2010 income statement. On 31 July 2012, the Civil Court dismissed the case. On 4 April 2013, the Appeals Court ordered the Company to pay the compensation totaling Baht 1.4 million to the plaintiff, plus interest at a rate of 7.5% per annum from the date the lawsuit was filed. However, on 17 May 2013, the Company submitted a petition to appeal the verdict of the Supreme Court. On 22 January 2016, the Supreme Court dismissed the Companyâ&#x20AC;&#x2122;s petition and the case was finalised in accordance with the verdict of the Appeals Court. The Company therefore has to pay the recorded compensation claim totaling Baht 1.9 million to the plaintiff. b) On 30 August 2013, a company filed a civil lawsuit against the Company for breach of factory lease agreements, claiming compensation for damages amounting to Baht 6.5 million, plus interest at a rate of 7.5% per annum from the date the lawsuit was filed until the payment is made, and additional damages at a monthly rate of Baht 50,000 per leased unit from the date the lawsuit was filed until the earliest of the date repair of the factories is completed or the aforementioned payment is made. On 8 May 2014, the Court set an appointment for compromise negotiations, and the Company offered to pay compensation amounting to Baht 1.5 million. However, the plaintiff requested the Company pay compensation of Baht 5.0 million in return for it withdrawing the lawsuit. As a result the lawsuit could not be finalised. The Companyâ&#x20AC;&#x2122;s management has assessed the circumstances and believes that the Company will incur losses not exceeding the amount requested by the plaintiff. The Company therefore recorded provision for compensation claim of Baht 5.0 million in the financial statements for the current year. On 30 September 2014, the Court ordered the Company to pay

118

Taokaenoi Food & Marketing Public Company Limited

Business Operation

compensation totaling Baht 4.5 million to the plaintiff, plus interest at a rate of 7.5% per annum from the date the lawsuit was filed until the payment is made. However, on 17 December 2014, the Company submitted a petition to appeal the verdict of the Appeals Court. In this regard, the Appeals Court ordered the Company to pay compensation totaling Baht 0.9 million to the plaintiff, plus interest at a rate of 7.5% per annum from the date the lawsuit was filed until compensation is paid. On 14 August 2015, the Company appealed the verdicts of the Civil Court and the Appeals Court to the Supreme Court. As of this report date, the Company has not paid the compensation and the case is currently under the Supreme Court’s consideration.

Management and Corporate Governance

34. Fair value hierarchy As at 31 December 2015, the Company had the asset that was disclosed at fair value using different levels of inputs as follow.

Investment property

(Unit: Million Baht) Consolidated/Separate financial statements Level 2 Level 3 Total Level 1 42.1 42.1

Financial Positions and Operating Results

During the current year, there were no transfers within the fair value hierarchy. 35. Financial instruments 35.1 Financial risk management The Group’s financial instruments, as defined under Thai Accounting Standard No.107 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, accounts receivable and payable, loans receivable and payable. The financial risks associated with these financial instruments and how they are managed is described below. Credit risk

Annual Report 2015

Other Related Information

The Group is exposed to credit risk primarily with respect to accounts receivable and loans. The Group manages the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Group does not have high concentration of credit risk since it has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of accounts receivable and loans as stated in the statement of financial position.

119

Interest rate risk The Groupâ&#x20AC;&#x2122;s exposure to interest rate risk relates primarily to its cash at banks and interest-bearing loans. Most of the Groupâ&#x20AC;&#x2122;s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate. Significant financial assets and liabilities classified by type of interest rate are summarised in the tables below, with those financial assets and liabilities that carry fixed interest rates further classified based on the maturity date, or the repricing date if this occurs before the maturity date.

Financial assets Cash and cash equivalents Trade and other receivables Restricted bank deposits

(Unit: Million Baht) As at 31 December 2015 Consolidated financial statements Floating Fixed interest rates Within More than interest Non-interest 1 year 1 - 5 years rate bearing Total Interest rate (% per annum)

Financial liabilities Short-term loans from banks Trade and other payables Long-term loans Liabilities under finance lease agreements

Financial assets Cash and cash equivalents Trade and other receivables Restricted bank deposits

1,437 1,437

38 418 456

1,476 418 37 1,931

0.125 - 0.90 0.25 - 1.30

265 5 270

13 13

112 112

476 476

265 476 112 18 871

2.00 - 3.30 4.10 4.47 - 5.85

(Unit: Million Baht) As at 31 December 2014 Consolidated financial statements Floating Fixed interest rates Within More than interest Non-interest 1 - 5 years rate bearing Total Interest rate 1 year (% per annum)

Financial liabilities Short-term loans from banks Trade and other payables Other short-term loans Long-term loans Liabilities under finance lease agreements

120

1 37 38

Taokaenoi Food & Marketing Public Company Limited

1 36 37

45 45

22 468 490

68 468 36 572

0.125 - 1.10 1.15 - 2.00

290 50 16 356

22 22

42 42

451 451

290 451 50 42 38 871

2.00 - 6.75 4.00 5.13 - 5.63 2.67 - 5.78

(Unit: Million Baht)

Financial assets Cash and cash equivalents Trade and other receivables Restricted bank deposits

1,401 1,401

37 454 491

265 4 269

12 12

112 112

459 459

Interest rate (% per annum)

1,439 0.125 - 0.90 454 37 0.25 - 1.30 1,930 265 459 112 16 852

Management and Corporate Governance

Financial liabilities Short-term loans from banks Trade and other payables Long-term loans Liabilities under finance lease agreements

1 37 38

Business Operation

As at 31 December 2015 Separate financial statements Floating Fixed interest rates Within interest Non-interest More than 1 year rate bearing Total 1 - 5 years

2.00 - 3.30 4.10 4.47 - 5.85

(Unit: Million Baht)

Financial assets Cash and cash equivalents Trade and other receivables Restricted bank deposits

Interest rate (% per annum)

1 36 37

29 29

21 508 529

51 0.125 - 1.10 508 1.15 2.00 36 595

290 50 15 355

20 20

42 42

440 440

290 440 50 42 35 857

2.00 - 6.75 4.00 5.13 - 5.63 2.67 - 5.78

Annual Report 2015

Other Related Information

Financial liabilities Short-term loans from banks Trade and other payables Other short-term loans Long-term loans Liabilities under finance lease agreements

Financial Positions and Operating Results

As at 31 December 2014 Separate financial statements Floating Fixed interest rates Within interest Non-interest More than 1 year rate bearing Total 1 - 5 years

121

Foreign currency risk The Groupâ&#x20AC;&#x2122;s exposures to foreign currency risk arise mainly from trading transactions that are denominated in foreign currencies. The Company seeks to reduce this risk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year. As at 31 December 2015 and 2014, the balances of financial assets and liabilities denominated in foreign currencies are summarised below. Foreign currency

US dollar Singapore dollar Japanese yen

Foreign currency

US dollar Singapore dollar Japanese yen

Financial assets 2015 2014 (Million) 1.2 1.5 -

(Million) 1.8 1.5 -

Financial assets 2015 2014 (Million) (Million) 1.2 1.8 1.5 1.5 -

Consolidated financial statements Financial liabilities Average exchange rate 2015 2014 2015 2014 (Million) 2.4 0.9 0.2

(Million) 5.2 0.4

(Baht per 1 foreign currency unit) 36.09 32.96 25.52 24.90 30.28 27.38

Separate financial statements Financial liabilities Average exchange rate 2015 2014 2015 2014 (Million) (Million) (Baht per 1 foreign currency unit) 2.4 5.2 36.09 32.96 0.9 25.52 24.90 0.2 0.2 30.28 27.38

Forward exchange contracts outstanding are summarised below. Foreign currency US dollar Singapore dollar Foreign currency US dollar Foreign currency US dollar Singapore dollar Foreign currency US dollar

122

As at 31 December 2015 Sold amount Contractual exchange rate (Million) (Baht per 1 foreign currency unit) 34.85 - 36.38 1.2 0.8 25.29 - 25.41 Bought amount Contractual exchange rate (Million) (Baht per 1 foreign currency unit) 0.6 35.62 - 36.14 As at 31 December 2014 Sold amount Contractual exchange rate (Million) (Baht per 1 foreign currency unit) 1.5 32.07 - 32.93 0.5 25.10 - 25.26 Bought amount Contractual exchange rate (Million) (Baht per 1 foreign currency unit) 32.22 - 32.61 0.7

Taokaenoi Food & Marketing Public Company Limited

Contractual maturity date January - May 2016 April - June 2016 Contractual maturity date January - April 2016 Contractual maturity date February - June 2015 May - June 2015 Contractual maturity date January 2015 41

35.2 Fair values of financial instruments Business Operation

Since the majority of the Group’s financial instruments are short-term in nature, loans receivable and payable bear interest rates which are close to the market rate, their fair values are not expected to be materially different from the amounts presented in the statement of financial position. 36. Capital management

Management and Corporate Governance

The primary objective of the Company’s capital management is to ensure that it has appropriate capital structure in order to support its business and maximise shareholder value. As at 31 December 2015, the Group's debt-to-equity ratio was 0.5:1 (2014: 2.6:1) and the Company's was 0.5:1 (2014: 2.3:1). 37. Events after the reporting period On 23 February 2016, a meeting of the Company’s Board of Directors passed a resolution approving to propose that the Annual General Meeting of shareholders to be held in April 2016 adopt a resolution to pay a dividend of Baht 0.105 per share, or a total of Baht 144.9 million, to the shareholders in respect of the 2015 profit. The dividend will be paid and recorded after it is approved by the Annual General Meeting of the Company’s shareholders.

Financial Positions and Operating Results

38. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 23 February 2016.

Other Related Information

42 2015 Annual Report

123

Part 4

Other Related Information

17 Reference Business Operation

Auditor

: EY Office Limited Khun Sumalee Reewarabandit (Certified Public Accountant ID 3970) 33rd flooe, Lake Ratchada Building, 193/136-7, New Ratchadapisek Road, Klongtoey, Bangkok 10110 Phone 0 2264 9090 Fax 0 2264 0789-90

Legal Advisor

: Kudun and Partners Company Limited 973 President Tower, 14th floor, Ploenchit Road, Lumpini, Patumwan, Bangkok 10330 Phone 0 2656 0818 Fax 0 2656 0819

Financial Positions and Operating Results

: Thailand Securities Depository Company Limited 62 Stock Exchange of Thailand (SET) Building, Ratchadapisek Road, Klongtoey, Bangkok 10110 Phone 0 2229 2800 Fax 0 2654 5427

Management and Corporate Governance

Securities Registrar

Other Related Information

Annual Report 2015

125

18 Investors Information Abbreviation TKN (listed company, SET) Industry - Agriculture and food Business â&#x20AC;&#x201C; Food and beverage Company Registration 0107556000337 Type of business Manufacturing and distribution of processed seaweed Website www.taokaenoi.co.th Year of establishment 2004 First trading day at SET December 3, 2015 Registered Capital Paid Capital Stock Value Accounting Period Shareholders

345.0 million Baht 345.0 million Baht Common stock, 0.25 Baht per stock January 1 â&#x20AC;&#x201C; December 31 Major shareholders are Peeradechapan Family, holding 73.91% shares and remaining shares are held by organizations and investors

Investor Relations

Mr. Koosoon Rattanaporn Phone 0 2984 0666 ext. 315 Email koosoon.r@taokaenoi.co.th

Mr. Jirapong Suntipiromkul Phone 0 2984 0666 ext. 303 Email jirapong.s@taokaenoi.co.th

Contact: Muangthong Thani Office Address 337 Bond Street Road, Bangpood, Pakkred, Nontaburi 11120 Phone 0 2984 0666 Fax 0 2984 0118 Noppawong Factory / Head Office Address 12/1 Moo 4, Namai, Ladlumkaew, Patumthani 12140 Phone 0 2108 6888 Fax 0 2108 8706

126

Taokaenoi Food & Marketing Public Company Limited

TKN Taokaenoi Food & Marketing Public Company Limited Muangthong Thani Office: 337 Bond Street Road, Bangpood, Pak Kret, Nonthaburi 11120 Tel 0 2984 0666, Fax 00 2984 0118